Chapters 6 & 7 Quiz
A legally binding decision by a third part is
Arbitration
Small claims court provides settlements of disputes that are
Below a set dollar amount and do not need a lawyer
The market value of your home is determined primarily by
Comparable home sales in your neighborhood
Information gathering is an important part of which phase of purchasing a motor vehicle?
Phase 1 Pre-shopping activities
The first step in resolving consumer complaints involves
Returning to the place of purchase
The major factor that affects a person's qualification for a mortgage is
The applicant's credit rating
What is usually included in the lease agreement for a rental?
The conditions in which the landlord may enter the rental unit.
If you cannot afford a lawyer, you can get free or reduced fee legal representation from
The legal aid society
A benefit of using a real estate agent in selling your home is
They can help make sure that potential buyers qualify for a mortgage
A common advantage associated with home ownership is
financial benefits
A _____ allows a person to borrow on the paid-up value of a home.
home equity loan
When leasing a motor vehicle, the capitalized cost refers to the
price of the vehicle
What is the unit price if a 32-ounce box of brown sugar that costs $3.20?
$0.10 per ounce
Given the information below, what is the total cost of renting per year? Annual rent payments $14,400 Annual renter's insurance $300 Annual interest lost on security deposit $10 Value of apartment $150,000
$14,400 + $300 + $10 = $14,710
If you have a $252,000, 30 year, 5 percent mortgage, how much of your first monthly payment of $1,354.50 would go toward principal?
$304.50
Using the following information, what is the cost to buy a car? Down payment $5,250 Monthly loan payment $615 per month for a six-year loan Opportunity cost of down payment $5,250 x loan period (in years) x 2% interest Estimated value of vehicle at end of ownership period $6 250
$43,910.00 Down Payment + Total Monthly Loan Payment + Opportunity Cost of Down Payment - estimated value at end of ownership $5,250 + ($615 x 12 months x 6 years) + ($5,250 x 6 years c 2%) - $6,250 = $5,250 + $44,280 + $630 - $6,250 = $43,910.00
If you have a $150,000, 30-year, 5 percent mortgage, how much of your first monthly payment of $805.23 would go toward interest?
$625.00
Most lending institutions believe that a person can afford a monthly payment of about _____ percent of gross income less any longtime debts.
35
What is the difference between a condominium and a cooperative property?
A condominium is where a person buys and owns the unit they live in and a cooperative is where a person does not own the property but buys stock in the building that gives them the right to live in the unit.
In buying a home earnest money is
A deposit that buyers offer to show they are serious about the purchase
What is the difference between a full warranty and a limited warranty?
A full warranty ensures that repairs will be covered for a specific period of time and a limited warranty only covers certain aspects of the product.
What are the 4 phases of research-based buying?
Engage in pre-shipping activities, evaluate the alternatives, select and purchase the pry, and consider post-purchase activities.
A lease is mainly designed to protect the rights of the landlord.
False
A purchasing decision starts with gathering information
False
Consumer information from business organizations is usually the most objective type of data available to help in a buying decision
False
Most consumer complaints are resolved with the use of a government agency or by taking legal action.
False
Most mortgage rates are established by government agencies.
False
Closing costs are
Fees and charges paid to finalize the purchase of a home
The difference between mediation and arbitration is that
Mediation involves using an impartial third party to negotiate a settlement between the involved parties and arbitration is where the decision of settlement is up to a third party.
The highest prices for used cars are usually at a
New-car dealer
Using the following information, what is the cost to lease a car? (assume there are no charges for damage at the end of the lease.) Security deposit $300 Monthly lease payment $300 per month for a 5-year lease Opportunity cost of security deposit $300 x loan period (in years) x 2% interest End of lease charge $500
Total lease cost = Total monthly lease payment)$300 x 12 x 5) + opportunity cost ($300. X 5 x 2%) + end of lease charge $500 = $18,530
An express warranty is usually in written form.
True
Financial risks are associated with the purchase of a home.
True
National name products usually cost more than store brands or private label items
True