Exam 5: Making Automobile and Housing Decisions

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A [ real estate short sale | foreclosure ] is an effort by mortgage lenders to come to terms with homeowners who are about to default on their mortgage loans.

Points paid to secure a mortgage to purchase a primary residence and to refinance a mortgage are usually immediately tax deductible if you itemize your taxes.

When you lease your apartment from a nonprofit corporation that owns the building and you own a share of the nonprofit corporation, you own a:

Prequalification provides a home buyer with the specific mortgage amount that he or she is eligible for (subject to the expected changes in interest rates).

A PITI payment is composed of principal, interest, property taxes, and homeowner's insurance.

Which of the following will help a buyer know ahead of time the specific mortgage amount that he or she will be eligible for (subject to changes in rates and terms)?

The loss in the value of an automobile that occurs over its period of ownership is called:

For much of the life of a fixed-rate mortgage loan, the majority of each monthly payment goes to pay the:

Early termination clauses on an auto lease typically apply to cars that are stolen or totaled in an accident, as well as when you just want to return the vehicle before the end of the lease.

The job of a mortgage banker is to locate conventional loans for clients.

A foreclosure happens when:

Kurt has $4,500 for a down payment and thinks he can afford monthly payments of $300. If Kurt can finance a vehicle with a 7%, 4-year loan from the automobile dealer, what is the maximum amount he can afford to spend on the car? (Round the answer to the nearest dollar.)

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Auto lease terms typically run [ 2 to 4 years | 12 to 36 months ].

A veteran might be able to buy a home with no down payment with:

At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have a(n) _____ lease.

The monthly mortgage payment divided by your monthly gross income equals an affordability ratio.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. The most popular type of lease is the [ closed-end | open-end ] lease.

_____ are ongoing costs of homeownership.

When shopping for a lease, you want:

Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only if: