HDFS 186 Consumer Economics Exam 2

-2.5X

This is the second "Rule of Thumb": First time home buyers should not pay more than _____X (times) their annual gross income

Loan to Value

Transitions of ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage lien as a percentage of the total appraised value of real property.

False. A landlord is not required to paint nor change the locks before a new renter moves into the apartment

True or False. A landlord is required to paint and change the locks before a new renter moves into the apartment.

True

True or False. An obligation as a tenant is to provide and maintain appropriate receptacles for removal of garbage and arrange for their removal

True

True or False. Any time you give a landlord money, get a signed, dated receipt that says how much you paid and what you paid it for.

False. DON'T Pay a security deposit before you sign a lease.

True or False. You should pay a security deposit before you sign a lease.

Puffery advertismenty

Type of advertising with little or no constructive information Major goal- persuade rather than inform

Government VA loan

Type of mortgage insured by the Department of Veterans Affairs against losses from default.

Assumption of Mortgage

A process in which the buys accepts the terms of the seller's mortgage, usually after negotiating with the lender

Closing costs

A type of mortgage The expenses, over and above the price of the property that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.

Principle

A type of mortgage financing that is the amount of the debt minus interest. (Debt-interest)

Usuary Laws

A type of mortgage financing which claim laws that mandate how much interest can be charged by lenders

Comparative advertising

Advertising that provides comparisons between similar products -Omit, disguise, minimize bad aspects

"pre-move-in"

Along with a check- in sheet You will want to perform a "_______" inspection before moving your personal belongings into the apartment. -You will want to do this inspection with the landlord.

1. Application fee 2. Security deposit 3. Last month's rent 4. Utility hookups

In addition to a monthly rent, what are 4 fees that can also be included in beginning to rent an apartment? ("start up costs")

Yes

Is the landlord required to provide an itemized list of any deductions to your security deposit when moving out?

Landlord obligation

Landlord or tenant obligation? Arrange for or make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.

Both the Landlord and the tenant are obligated to these codes

Landlord or tenant obligation? Comply with building and housing codes relating to health and safety

Tenant Obligation

Landlord or tenant obligation? Keep occupied unit clean and safe

Tenant Obligations

Landlord or tenant obligation? Provide and maintain appropriate receptacles for removal of garbage and arrange for their removal

Tenant obligation

Landlord or tenant obligation? Regularly remove garbages and disposal

Tenant Obligation

Landlord or tenant obligation? Use in a reasonable manner all electrical, plumbing, sanitary, heating, and appliances.

Tenant Obligations

Landlord or tenant obligation? keep all plumbing fixtures clean

Tenant obligation

Landlord or tenant obligation?Not deliberately or negatively destroy, deface, damage, impair, or remove any part of the premises or knowingly permit any person to do so

Renter's insurance

Landlords can require that you carry what type of insurance before allowing you to move in?

1. Availability of money 2. State of economy

Mortgage instruments are based on what two factors?

Closing

The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the ownership of the property is transferred to the buyer

Landlord must give a 30 day notice.

The landlord may increase the rent in any amount providing a written notice within how many days?

1. 25-30% 2. Gross

The rule of thumb is to spend no more than 1.____-_____%of your monthly 2.Net or Gross Income on rent. In addition to your monthly rent, prepare for the following "start-up" costs.

Supply and demand

This Financing Purchase of a Home is the 1st step the includes both the buyer's market and well and the sellers market

The Tenant Screening Process

This Process is the vehicle they use to determine your potential as a tenant, and is used by landlords to protect their investment, as well as to ensure the happiness and well being of other tenants and neighbors.

Rental criteria

This criteria is used as guidelines that property managers use to decide whether to rent to an applicant and are set by the property manager and must be applied consistently to all applicants.

Security deposits

This is a deposit that relates to damage in your apartment. A landlord needs to know his interests are protected. The Deposit is usually the equivalent to one months' rent.

Fixed Term Lease

This is a fixed lease that states how long a tenancy will last, and it is liable for rent the entire term of the lease.

36%

This is the third "Rule of Thumb": Monthly housing expense combined with other installment debt should NOT exceed approx. _____of your take home pay

Home equity loan

This loan (as well as owner - financing loans) is often referred to as a second mortgage, the proceeds of which are used for home improvements or other purposes.

Conventional mortgage

This term is a type of mortgage that has a fixed rate and a fixed payment plan. It is a loan obtained at a bank or other lending institutions that does not involve federal or state subsidies.

Adjustable rate mortgage

This type of mortgage (has a floating plan) by a lending institution, with rates of interest and perhaps other terms that often change after a stated period of months or years.

Tenant screening

This type of screening can include : 1. rental, credit and criminal history 2. landlord references, and information about your character 3. general reputation, personal characteristics and lifestyle.

True

True or false. "Contrary to popular belief, tenants may be evicted during the winter months!"

False. A pet deposit cannot exceed $2,500.

True or false. A security pet deposit can exceed $2,500.

False. Only some landlord's require perspective tenants to pay an application fee.

True or false. All landlord's require perspective tenants to pay an application fee.

True

True or false. If you are selling a home, asking your real estate broker to agree to a lower commission can save you a thousand dollars or more.

False. It is the tenant's obligation to provide running water and reasonable amounts of hot water and heat

True or false. It is the Landlord's obligation to provide running water and reasonable amounts of hot water and heat

True

True or false. It is the Landlords job to Provide smoke detectors in each unit. But the batteries in the smoke detectors is the tenant's responsibility.

True

True or false. Security deposits cannot exceed one month's rent.

Cap

Type of mortgages that can be found in adjustable rates, which can increase(or decrease) to only a certain upper (or lower) limit.

Government FHA loan

Type of mortgages that is insured by the Federal Housing Administration against losses from default.

1. Repair the deduct and deduct expense from rent 2.Sue the landlord in Small Claim's Court 3. Vacate the premises (serious problems)

What are the three courses of action you can take if repairs are Still Not Made?

The purpose is to cover the cost of checking the tenant's references.

What is the purpose of having perspective tenants pay an application fee?

policies and procedures

What is the term for the property management company's requirements to be followed, which can be found on a lease and are as important as the items that are already ?

Emotional Advertising

advertising that persuades because product/ service satisfied a psychological need "doesn't your family deserve the best?" Comparative-provides comparisons between similar products Omit, disguise, minimize bad aspects

Institutional advertisment

- Type of advertising associates a product with ideas and institutions that are valued by the majority Chevrolet- "Heartbeat of America"

Points

-A type of mortgage that (often called a premium) charges equal to a stated percentage of the loan. (1 point is equal to 1 percent of the loan amount). -Or one way for lenders to increase profits -borrowers may also pay points to "buy down" the interest rate.

Informative advertising

A form of advertising that offers useful information about products or services Example: business or professional announcements found in newspapers

Foreclosure

A type of act in mortgage financing that states that as a result of a default on loan; lender can seize property and be forced to sell it off to pay debt

Advertisment

Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Fixed rate mortgage

Consumers seek a, FIXED- RATE or ADJUSTABLE RATE mortgage, because they offer the security of a fixed payment over a determined period of time.

No. A periodic lease has no specific ending date.

Does a periodic lease have a specific ending date?

Application Fee

Don't pay the this Fee unless you have a good chance of getting the apartment. If you have any negative information in your rental or credit history, tell the Landlord about it before you pay the fee.

Policies and procedures

Following these guidelines regarding property management companys may include things such as: -may submit all complaints and repairs in writing - Instructions for guest conduct - Areas where smoking is not allowed - Proper window coverings; when they must be in place and what types are allowed - Garage doors must remain closed

insurance fund

Foreclosure losses can be prevented by creating what kind of fund?

1. fit to live in- maintaining unit in good and safe working order 2. Arrange for or make ALL repairs 3. Comply with building and housing codes that is in compliance with state and local health and housing codes.

Generally,what are 3 main responsibilities landlords have to make sure that the rental unit is...

As a business transaction

How do Landlord's look at you when they are thinking about renting to you?

A fixed term requires a 60 day notice

How long is a written notice for a fixed term lease?

30 days

How long must the landlord take to return your security deposit?

Increase

If the index increases, the mortgage loan rate will increase or decrease?

Tenant Obligation

Landlord or tenant obligation? Provide running water and reasonable amounts of hot water and heat

Tenant Obligation

Landlord or tenant obligation? Conduct himself/herself and require other persons on the premises with the tenant's consent to conduct themselves in a manner that will not disturb neighbors.

Landlord Obligation

Landlord or tenant obligation? Maintain in good and safe working order all electrical, plumbing, sanitary, heating appliances supplied by landlord

check-in sheet

North Dakota law requires a landlord to provide you with this item which you fill out by describing the condition of the facilities in and about the premises to be rented at the time of entering into a lease agreement. - This also must be agreed to and signed by both you and the landlord.

Increases

On a term lease rent increases or decreases at the end of the lease?

Down Payment

Payment considered as the buyer's initial equity in the house.

D. Utility hookups

Responsibility for this expense is generally specified in the Lease or rental agreement. A. Application fee B. Security deposit C. Last month's rent D. Utility hookups

"Rule of Thumb"

Rules that are applied when deciding if you can buy a home.

1. if the application fee is refundable 2. request a receipt for payment

Tenants should ask landlord's what two things when thinking about applying for an apartment that requires an application fee?

Escrow

Term for a bond, deed, or other document kept in the custody of a third party, taking effect only when a specified condition has been fulfilled. Consequence= prepayment penalty

Assumable loan

Term for an assumed loan of a seller.

Down payment

The buyer's initial equity

Month- to- month (periodic) lease

The disadvantages of this type of lease are that your landlord can raise rent, change leases terms, and end the lease with proper notice for any or no reason.

Fixed Term Lease

The disadvantages of what kind of lease states that you cannot move without the landlord's consent and you may be penalized for breaking the lease.

- 25-30%

The first "Rules of Thumb" : When deciding to buy a home?No more than ___-____% of total net monthly income should be spent for hotel housing

1. They pay their rent on time 2.They keep their unit reasonably clean 3.They do not participate in, nor allow any guests to engage in, illegal activities in their unit or within the common areas or grounds of their building 4.They never bother their neighbors.

What 4 things do most people who have a good rental history have in common? They pay their rent on time They keep their unit reasonably clean They do not participate in, nor allow any guests to engage in, illegal activities in their unit or within the common areas or grounds of their building They never bother their neighbors.

1. Landlord Right of Entry Emergency: Landlord believes tenant has abandoned the premises 2. Purpose of inspecting the premises, making repairs, improvements, or agreed services 3. Purpose of showing the unit to potential tenants. insurers, agents, workers 4. Landlord must attempt to get the tenants consent for an agreed time of entry

What are four reason that allow a Landlord the Right of Entry into your apartment?

Each time the tenant pays rent to the landlord

When does a periodic lease automatically renew?

Teaser mortgage

An initial rate on an adjustable-rate mortgage (ARM). This rate will typically be below the going market rate, and is used by lenders to entice borrowers to choose ARMs over traditional mortgages.

Mortgage Insurance

An insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan.

Adjustable rate mortgage

Are FIXED RATE or ADJUSTABLE RATE mortgages less predictable during times of economic upheaval?

Discriminate

Both Federal and State laws prohibit's Landlords to ______________ against potential renters by refusing to sell, rent, or lease housing to them because of their race/color, national origin, religion, gender, family status or disability.

Mortgage

Term for a legal instrument that gives a lender conditional title to a property. (payment to a lender; lender then holds title to property) this guarentees that if the lender fails to pay interest and principle, the lender may force the sale of property through foreclosure.

Home equity

Term for the Amount of a home that the borrower has actually paid for

Amortization

Term for the distribution of payment into multiple cash flow installments.. Unlike other repayment models, each repayment installment consists of both principal and interest.

Month- to- month(periodic) lease

The advantages of this type of lease are the ability to move relatively quickly with Proper Notice and you can negotiate with the landlord for changes in lease terms (i.e. adding a roommate).

Fixed Term Lease

The advantages of what kind of lease are that the landlord can not change the lease terms without your consent and the rent remains the same for the length of the agreement?

Typical Renter's Insurance

What typical insurance policy covers damages such as: 1. personal property from wind or fire 2.Theft 3. Personal liability in the event you are sued over accidental injury to others who are in the apartment 4. Accidental damage to property of others in your care 5. Living expenses if you are forced to live elsewhere while your apartment is being repair

PITI

When a mortgage lender is trying to determine your ability to repay, one area at which it looks is your total monthly housing payment. Total of monthly housing= Principal, Interest, Taxes, Insurance

Promptly

When should tenants notify the landlord when repairs become necessary? -Verbal notice, and send written notice -Contract building codes (city)

1. Security deposit 2. Liability for rent for the period

When terminating a periodic lease (referring to the lease), the failure to give proper 30 days notice could result in the loss of what two things ?

VA loans

Which government loan does not require a downpayment?

Conventional mortgage is the most popular

Which is the most popular type of mortgage? an adjustable or a conventional mortgage