Chapter 6, 7, 8, 9 personal finance

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refinance

finance (something) again, typically with a new loan at a lower rate of interest

capacity

financial ability to meet credit obligations

300-850

generally, what are credit scores between

Veterans Administration (VA loans)

government financing program for service veterans only; no down payment; rate based on your credit score

Federal Housing Authority (FHA)

government financing program that gives a loan for low to middle income family; lower down payment; slightly higher rates due to increase risk; and fee for insurance

warranty of merchantability

guarantees that the product is fit for the ordinary uses for which it is intended

10, 15, 20, 25, 30 yrs or whatever years you want

how long is a mortgage

20%

how much do banks want for a downpayment?

warranty of title

indicates that the seller has the right to sell the product

good faith estimate sheet

is a document that includes the breakdown of approximate payments due upon the closing of a mortgage loan

reverse mortgage loans

is a type of home loan for older homeowners that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner's insurance.

amortization

is paying off an amount owed over time by making planned, incremental payments of principal and interes

appraisal

lender will require an __________ of the property to determine fair market value

larger

the ______________ the downpayment, the easier it is to get a mortgage

any additional fees charged by the lender

the annual percentage rate adds ________

-made it more difficult for people to file for bankruptcy -people must wait 8 years between bankruptcies -those who can pay must pay part of their debt back

the bankruptcy abuse prevention and consumer protection act of 2005 made...

contingency clause

this contract condition(s) states that the agreement is binding only if certain events occur

all applicants start off on the same footing and you cannot discriminate against race, color, age, sex, or marital status

what is the equal credit opportunity act?

location

what is the most important factor in selecting a home

1. help families with serious debt problems get out of debt 2. teach people money management skills to stay out of debt

what is the purpose of CCCS

present you offer to the seller negotiating a settlement price assisting you in getting financing representing you at closing

what is the purpose of a real estate agent?

-notify the creditor in WRITING within 60 days of the euro and the creditor MUST acknowledge your letter within 30 days

what must you do if there is a billing error

walk through, closing, closing cost, good faith estimate sheet

what occurs during the closing of a house?

Your employer, position, income Former address Former employer Spouse's name, SS #, income If you rent or own your home Returned checks More

whats in your file for credit bureaus

finance companies, retailers, credit cards, payday loans,

where do you get expensive loans?

from family members

where do you get inexpensive loans?

from banks, credit unions, and others

where do you get medium priced loans?

1) lock you rate for 30-60-90 days 2) you may float your rate

with interest rates at time of application you can either 1) 2)

character

your attitude towards credit obligations

higher

APR is always (lower or higher) than the interest rate

20%

Loan should not exceed _____

false: consumer credit does NOT include a home (purchase) mortgage

T or F: Consumer credit includes a home (purchase) mortgage

Most information is 7 years Personal Bankruptcy 10 years Unless applying for credit $75,000 or greater or for life Insurance of $150,000 or more.

What are the limits on adverse Data

you will be required to purchase private mortgage insurance (PMI)

What happens if the downpayment is less than 20%?

principal x rate of interest x time

What is the interest rate formula

amortization

a conventional mortgage allows for the _____________ of the loan

consumer credit counseling services

a local non-profit organization affiliated with the national foundation for consumer credit

short sale

a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property

warranty

a written guarantee from the manufacturer or distributor that specifies the conditions under which the product can be returned, replaced, or repaired

Chapter 13 bankruptcy

also known as Wage-Earners Plan; propose a plan to the bankruptcy court for paying off your debts over a period of time and make regular payments to the ? trustee who pays your bills; may keep all of your property

collateral

an asset that you pledge to a financial institution to obtain a loan

negative amortization

deferred interest or graduated payment mortgage) occurs whenever the loan payment for any period is less than the interest charged over that period so that the outstanding balance of the loan increases

credit

defined as an arrangement to receive cash, goods, or services now and pay for them in the future; "obligating future earnings"

deed

document that transfer ownership form one party to another

1%

each discount point is equal to _____ of the loan amount

added cost later

what happens when you lowball when buying a vehicle

long term loan for a piece of property

what is a mortgage?

open line of credit where you charge, repay, charge again; extended to ac certain $$ limit

what is open end credit?

Grace Period or Float period

what is the biggest advantage of credit

truth in lending law 1969

Creditors are required, by law, to state the cost of borrowing as a dollar amount so that consumers would know exactly what the credit charges will be. -done with the Annual Percentage Rate or the APR.

title insurance

Defines the boundaries for the property and conducts a search to make sure the property is free of claims.

appraisal

conducting a home inspection is not a(n) ________________ (vice versus)

limited warranty

covers only certain aspects of the product such as arts or requires the buyer to incur part of th costs for shipping or repairs

death, disability, or loss of property

credit insurance ensures the repayment of you loan in the event of _______, __________, or ________

consumer credit

credit used for personal needs

mortgage

monthly debt payments do not include ________

chapter 7 bankruptcy

most debts are forgiven, most assets are sold to pay off creditors, and certain assets are protected

provides protection meaning it assures quality

new car warranties provide ____________ meaning it __________ __________

time, mileage & parts

new car warranties vary in ________, _________, & ____________

sub prime

people with bad credit receive a __________ for mortgage loans & terms

points

prepaid interest charged by the lender

fair debt collections practices act

prohibits certain practices by agencies that collect debts for creditors but does not apply to creditors who collect debt themselves

title insurance

protects the owner and lender against financial loss resulting from future defects in the title and unforeseen claims.

1 or 2 points 5 points

rates for ARM are usually _____________ points a year with a max of _______ points over the life of the loan

conditions

refers to the general economic conditions that can affect your ability to repay the loan

capital

refers to your assets or net worth

homeowners protection act

requires that a PMI policy be terminated automatically when a homeowner's equity reaches 22% of the property value at the time the mortgage was executed

zoning laws

restrictions on how the property in an area can be used

rate cap

restricts the amount by which the interest rate can increase or decrease during the ARM (adjustable rate mortgage) term

warranty deed

seller guarantees the title is good

extended warranties

service contracts are also referred to as ______________ ______________

closing cost

settlement cost

full warranty

states that a defective product can be fixed or replaced during a reasonable amount of time

expressed warranty

usually in written form created by the seller or manufacturer and has two forms: the full warranty and the limited warranty

Emotional Problems The Use of Money to Punish The Expectation of Instant Comfort Keeping up with the Jones Overindulgence of Children Misunderstanding or Lack of Communication among Family Members The Amount of Finance Charges

what are some debt problems

underwriting fees document preparation fees loan processing fees

what are some examples of annual percentage rate fees

1. experian information solutions 2. transunion credit union information company 3. equifax services, Inc.

what are the 3 credit bureaus

sellers agent buyers agent dual agent listing agent

what are the 4 types of agents

character capacity capital collateral conditions

what are the 5 C's of credit management?

enjoy goods and services now do not have to carry cash points, rebates, sky miles, etc. may extend a manufacturer warranty or provide some insurance or roadside service

what are the advantages of credit

fixed period of time fixed interest rate fixed payment

what are the common features of closed end creditterm-8

overspending and credit cost money

what are the disadvantages of credit?

problem identification information gathering evaluating alternatives selecting vehicle options determining a purchase price car price negotiations/barganning

what are the phases for buying a vehicle?

fixed rate, fixed payment and fixed period of time

what are the three common characteristics of a mortgage

installment sales credit installment cash credit single lump sum credit

what are the three most common types of closed end credit?

credit life, credit accident & health, and credit property

what are the three types of credit insurance?

lowballing highballing

what are the two sales techniques to beware?

closed end credit and open end credit

what are the two types of credit

smart cards, debit cards, gift cards, Travel & entertainment cards, smart phones, home equity loans, line of credit or second mortgage

what are types of credit

impulse buying timing of purchases cooperative purchasing brands--store vs. national brands open dating uniting pricing

what are wise purchasing strategies?

Social Security payments Unemployment payments Limited equity in your home, car, truck, household goods, trade tools, books, etc. are protected

what assets of protected under the chapter 7 bankruptcy?

have a loan institution prequalify you

what can you ask to help you determine how much you can afford to spend on a home?

-sets procedures for correcting billing mistakes -refusing to make payments for defective goods -promptly crediting your payments

what did the Fair credit billing act (FCBA) in 1975 do

APR, fees, and disclosures

what did the credit card Act of 2009 affect

sticker price, invoice price, set price dealers (take it or leave it) and car buying services

what do you price bargain for new cars?

shows good faith with the contract

what does earnest money show?

-regulates the use of credit reports -requires the deletion of obsolete information -gives consumers access to their files -right to have erroneous data corrected

what does the fair credit reporting act do?

sticker in the window shield that either has a warranty, "sold as is," or "buyer beware"

what does used car warranties have?

-credit is destroyed -may be difficult to find employment -cost of bankruptcy (court cost, attorney's fees, trustee's fees & cost)

what happens when you file for bankruptcy

high amount trade-in and higher new car price

what happens when you highball when buying a vehicle


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