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