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Exam 8: The Home and Automobile Decision

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Question 31

Multiple Choice

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When planning your budget to determine how much your home will cost you every month,which of the following should you include in your planning?

A) Closing costs
B) PITI
C) Discount points
D) All of the above

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Question 32

Multiple Choice

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Suppose that you were thinking about leasing a new vehicle.Which of the following should not be an important consideration?

A) I drive less than 15,000 miles annually.
B) I like to get a new car every few years.
C) I dislike the hassle of trading-in or selling cars.
D) It's the only way I can afford the vehicle that I want.
E) I dislike the hassle of maintenance.

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Question 33

True/False

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If the roof of your condominium building needs expensive repairs,then the condominium board will pay for repairs at no expense to you.

Megan and Steve have found a home they want to purchase.The selling price is $320,000.They will put 20% down and get a 30 year,6% APR,monthly payment mortgage.Insurance is $1,800 per year and taxes are $3,000 per year.What is their monthly PITI?

Which of the following factors plays a role in determining the monthly lease payment of a car?

A(n) ________ ARM combines the aspects of fixed-rate and adjustable-rate mortgages.

Another name for a closed-end lease is a(n)

________ is a publication that provides unbiased ratings and recommendations for a host of products and services.

A mortgage with a 20% down payment will have a higher APR than one with less than 20% down.

Name the steps in the housing decision.

Tell about the advantages of a shorter-term mortgage over a 30-year one.

A key to negotiating a good price is?

Name the items that are deposited in an escrow account.

In evaluating your financial history,lenders generally focus on which of the following?

Subprime mortgages are mortgages taken out by people with low credit scores.

Regardless of what a potential borrower thinks he or she can afford,banks and other lenders impose a maximum amount that they will lend to a borrower based on the person's income and current debt levels.According the Keown book,what three factors do lenders look at when evaluating a potential borrower?

A ________ mortgage is designed to let the homeowner pay off the mortgage early.Payments begin at the 30-year fixed rate,then increase each year.

In general,the maximum ratio the lender would like to see on a PITI to Monthly Gross Income is?

The rate cap on an ARM protects the borrower.

Give the major financial advantages of home ownership.