Chapter 8 and 9 major purchases

These are automobile driving costs are categorized as fixed ownership costs.

Insurance Depreciation Interest on car loans Registration fees

How could the tax benefit and risk of a home equity loan best be described?

Interest is tax deductible, but default could mean you lose the home.

What are the advantages of owning a condominium?

Less maintenance tax benefits usually, good location

A variety of scams surface after Blank______ and Blank______.

Natural disasters and tragedies

common sources of home mortgages?

banks savings and loans mortgage companies credit unions

all affected parties are notified as to whether or not they want to participate or file an individual lawsuit.

class-action suit

The factors that influence the price of a used car include Blank______.

condition features and options number of miles demand for the model

Renting makes job transfers Blank______.

easier

Which of the following are personal factors that could affect your daily buying habits?

education age occupation gender

Product label on appliances includes information on operating _______, to assist you in selecting the most energy-efficient models.

expenses

One of the best sources of information about the product you are considering buying is:

independent testing organizations

A possible advantage of an automobile is the smaller upfront cash outlay.

leasing

In a(n) _____ process, a third party tries to settle a grievance, but the process is nonbinding.

mediation

Which of the following are examples of groups of people that might qualify for a class-action suit?

people injured by a defective product auto owners charged for unneeded replacement parts for their vehicles customers overcharged for a service

When closing on a home, the seller usually pays Blank______.

title insurance

A limited warranty covers only certain aspects of the product and requires the buyer to pay part of the costs for:

shipping or repairs

Joe Smith earns $72,000 per year. His bank uses a rule that PITI must be equal to or less than one third of gross monthly income. If his home owner's insurance is $100 per month, roughly how much of a monthly payment can Joe afford including taxes over and above the $100 for insurance?

$1,900

What are the disadvantages of owning a condominium?

Assessment fees Uncertain demand affecting property value Less privacy

Which of the following automobile driving costs are categorized as variable operating costs?

Oil Gas Repairs Parking costs and tolls

True or False: Monthly car lease payments are often less than monthly car financing payments.

True

True or false: Two external (market) factors that affect the price of a home are the current demand for housing and the financing options (i.e., interest rates) available.

True

When purchasing a home, the buyer can expect to pay closing costs such as Blank______.

recording fees appraisal fee

While most mortgage payments are fixed, ______ can be subject to increases over which the tenant has no control.

rent

Approximately 35 percent of U.S. households live in Blank______.

rental units

A _______ provides the landlord with funds to cover the cost of any damages done to the rental unit during the lease period.

security deposit

An express warranty is usually in writing, is created by the ______ or manufacturer, and has two forms: _______ warranty and limited warranty.

seller full

One of the reasons why renting offers fewer financial benefits than home ownership is that rent is not _____ deductible, while the interest on mortgage payments is.

tax

Just before closing on a house, you often do a Blank______ before accepting the property.

walk-through

T OR F: As a general rule, it may be wise to refinance when the interest rates on mortgages drop at least 1 percentage point below your current mortgage rate.

TRUE

Which of the following are advantages of home ownership?

Stability of residence and a personalized living location. Income tax savings because of mortgage interest. The ability to borrow against the equity in the home.

a third party tries to settle a grievance and the process is binding.

arbitration

Common sources of down payment funds to purchase a home include:

assistance from relatives. personal savings. the sale of investments.

The opportunity costs and common trade-offs of a housing decision include which of the following?

cost to commute to work when you live in area that offers less expensive housing the loss of tax advantages interest lost on money used for down payment