More finance test review

if the max loan-to-value that a lender will accept on a house costing 100,000 is 80% borrowers must make a down payment of at least

20,000

a veteran might be able to by a home w no down payment with a

VA loan guarantee

If you made a down payment of $11,000 on a house worth $110,000, the lenders will require _____ as a result of the size of the down payment.

a private mortgage insurance 20%

a real estate sale contracts will include

amount you have paid as an earnest money deposit

1ST steps in the auto buying process is

analyze how much you can afford to spend on a car

Behavioral bias in which an individual tends to allow an initial estimate to dominate the subsequent assessment regardless of new info to the contrary is called:

anchoring

At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have ____ lease.

closed end

_____ are expenses that borrowed way during the final step of a real estate purchase

closing cost

With prequalification, a buyer can

collect any problems on their credit report

you recently bought a new home you receive title to an individual unit/joint ownership of any common areas/facilities

condominium

what is the biggest fixed auto ownership cost

cost of installment loan payment

lenders will usually require a loan-to-value ratio of ______ of less for a borrower to avoid having to pay private mortgage insurance

80%

Fixed Rate Mortgage

A mortgage in which the interest rate does not change during the entire term of the loan.

type of payment that lowers the potential depreciation & therefore your monthly lease payments on a leased car?

capital cost reduction

The price of the car you are leasing is called the:

capitalized cost

loss in the value of an automobile that occurs over its period of ownership

depreciation

T/F the job of a mortgage banker is to locate conventional loans for clients

false

_____ are loans offering low payments for the 1st few years, gradually increasing until year 3/5 and then remaining fixed

graduated-payment mortgages

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

interest

a ____ ratio specifies the max % of the value of a property that a lender is willing to loan

loan-to-value

you take a car on a closed end lease for 5 years at the end of the 5th year you would need to pay additional Money only when

mileage limits are exceeded

max loan to value ratio that a lender will accept on a house costing $100,000 is 90% then the borrower must make a

minimum down payment of 10,000

the financing rate on a lease is called

money factor

which of the following are tax deductible if you itemize deductions

mortgage interest/property taxes

____ is a situation where homeowners owe more to the lenders than what their properties are worth

negative equity

helps a buyer know ahead of time the specific mortgage amount that they will be eligible for subject to change in rates/terms

prequalification

____ are ingoing costs of home ownership

property taxes/insurance

an escrow account is used to collect ____ from ones monthly mortgage payment

real estate taxes

Earnest money is the sum of money the home buyer deposits with the

seller to indicate the intent to purchase

foreclosure happens when

the lenders attempt to recover loan balances from the insolvent borrowers by forcing the sale of the home pledged as collateral