SUPA personal finance

lenders do not want mortgage payments to exceed ____ percent of your gross monthly income

25-30%

When an S&L is a mutual association, it means that it is owned by the

Depositors

most important rule for establishing a savings plan is to

Establish a regular pattern of saving

Commercial banks are insured by the

FDIC Federal Deposit Insurance Corporation

Interest rates on credit cards tend to be lower than most other forms of consumer credit

False

Nearly all credit cards have annual fees.

False

There are penalties for early withdrawal of funds from CDs

False

Using credit is the ideal way to provide for financial emergencies

False

debt safety ratio of 5% would generally be a signal of financial trouble ahead.

False

The largest investment you will make in your lifetime will probably be the purchase of an auto

False- a home is the most costly

Bank credit card purchases always begin accruing interest charges immediately

False- there is usually a grace period

Money Market Deposit Accounts are typically

Federally insured

The financing rate on the car you are leasing is called the

Money factor/rate of interest

could be deducted on your Federal income taxes

Mortgage interest

A fee charged as a condition of a mortgage loan that raises the interest rate is called

Mortgage points

A financial advantage of renting compared to purchasing housing is a

Need for down payment

Saving accounts are NOT referred to as demand deposits

True

The greatest fixed cost involved with owning an auto is usually the monthly loan payments

True

The purpose of a credit report is to evaluate the kind of risk you pose to the lender

True

credit limit refers to the max amount the cardholder can owe the issuer at any point in time.

True

Paying a loan off much quicker than scheduled is one way to build a good credit rating

True and false

As a percent of take-home pay, monthly consumer credit payments should not exceed

20%

Factors typically influencing the choice of where to maintain a checking account are

Convenience, services, and cost

Open account credit is characterized by

A monthly credit statement

What is not an interest-bearing account (doesn't provide high-interest rates)

A regular checking account

A company that offers direct deposit of her paycheck. This service is called

An EFT service

If you write a check for an amount greater than your account balance, the result will be

An overdraft

All of the following are useful ways to build a strong credit rating except

Apply for a long term loan and make late payments

______ are not a type of open account credit.

Bank debit cards

The price of the car you are leasing is called the

Capitalized cost

The down payment on the car you are leasing is called the

Capitalized cost reduction

Which earns a higher rate of interest on a certificate of deposit than on a checking account.

Certificate of deposit

The lender uses a credit application to determine if the borrower has the ____ to handle the debt

Character and capacity

The following are major sources of home mortgages

Commercial banks, thrift institutions, and credit unions

Credit union members are expected to have some

Common bond

If interest rates and monthly mortgage payments will not change over the life of your mortgage This is called a

Fixed rate mortgage

The ___ is really a second mortgage on your home

Home Equity Line of Credit

The majority of each monthly payment at the beginning of the loan goes to pay

Interest

Variable auto ownership costs are most dependent on

Mileage driven

The Annual Percentage Yield is the same as the

Nominal rate

____ is a reason for owning your own home.

Pride of ownership, a sense of stability, and a tax shelter

____ is an ongoing cost of homeownership.

Property taxes

____ could be deducted on your Federal income taxes

Real estate taxes

All of the following are key items lenders look at in granting credit except

Religious affiliations

Persons with very poor credit ratings can still get

Secured credit cards

Lower interest rates on certificates of deposit are associated with

Shorter maturities

The highest average cost housing to purchase would be a

Single family home

the first choice in housing in the United States is a

Single family home

A closed-end automobile lease is the most popular type of lease

True

A debt safety ratio of 25% might be a signal of financial trouble ahead.

True

An automobile is a personal use asset for most buyers

True

Automobiles tend to decrease in value over time

True

Bank credit cards represent the most common kind of open account credit

True

Capitalized cost on an auto lease is the same as the price of the car

True

FDIC covers stocks, bonds, and mutual funds are NOT purchased at banks.

True

Gasoline is a variable cost of automobile ownership

True

Individuals with better credit ratings usually can secure higher credit limits

True

A _____ does not represent a line of credit

debit card

The loss of value in a car over time is called

depreciation

Credit Unions are

mutual associations.

A credit card can provide an interest-free loan if you

pay the entire balance on or before the due date

The seller of the house typically pays the

real estate agent's commission