pf midterm
What step can you take if your credit application is denied?
Ask the reasons why you were denied credit.
Credit bureaus get their information from the following sources:
Banks, credit card companies, Finance companies, Stores
according to the e-reserves article, Credit Advice You Can Trust, author Laura Cohn suggests that when looking for a good credit counselor you should do all of the following EXCEPT: A. get in touch with the National Foundation for Credit Counseling for a reputable referral. B. get in touch with the Association of Independent Consumer Credit Counseling Agencies for a reputable referral C. contact the Better Business Bureau to see whether a credit counselor is accredited. D. conduct an advanced search on the Internet for reputable companies that will remove negative information off of your credit report for a small fee averaging $23 a month. E. find out from the Better Business Bureau if there have been any complaints made against the credit counselor and if they have been resolved.
D. conduct an advanced search on the Internet for reputable companies that will remove negative information off of your credit report for a small fee averaging $23 a month.
When evaluating your credit application, a lender may NOT
Deny you credit if you receive public assistance.
total fixed cost=
Depreciation + Loan interest + Insurance + License and registration fees
If you want to file a complaint against a bank in connection with any of the consumer credit protection laws, you
Do not need to have an account at the bank.
Major credit bureaus:
Experian. Equifax. Trans Union. VantageScore
True or False: According to the e-reserves article, What You Need to Know About Credit Scores author Jessica Anderson, the most credit-worthy are able to score a 900+ on their FICO scores, which puts them in the "A" range on a scale of "A" to "F".
False. Vantage-Score range from 501-990. FICO range from 300-850.
one of the most important things a buyer should complete before beginning the process of looking for a home is to
Get pre-approval for a mortgage
While evaluating alternatives, comparison-shopping will be beneficial for buying:
Items that can be researched easily with advertisements.
Home equity loans should be used for:
Major expenses such as home improvements or education.
What is an advantage of a car lease?
Monthly lease payments are usually lower than monthly financing payments.
Veronica has had a variable-rate mortgage for several years. Unfortunately, the monthly mortgage payments have not covered her interest owed. As a result, her home equity is decreasing because of
Negative amortization.
The text discusses several types of bonds. Which bond, which is no longer sold, electronically deposits interest into your bank account every six months?
Series HH
Major factors that affect the affordability of your mortgage include:
The amount available for a down payment. Current mortgage rates. Income. Length of the loan.
who is responsible for a loan repayment?
The cosigner and/or the borrower
A line of credit is
The maximum dollar amount of credit the lender has made available to a borrower.
The minimum monthly payment on a credit card is:
The smallest amount you can pay and remain a borrower in good standing.
many people expect:
Their incomes to increase to make it easier to make payments on past credit purchases.
If a loan is being paid in installments instead of one lump sum at the end of the loan period, the actual rate of interest
Will be higher than the stated rate.
What should a home buyer consider when evaluating a house?
Zoning laws. Location of businesses and future construction projects. School system. Property values of the community.
Total variable costs=
[ (annual mileage / miles per gallon) × Gas price per gallon] + Oil changes and repairs + Parking and tolls
A credit card holder who pays off his balances in full each month is known as
a convenience user
ources of reference that customers should consult on a vehicle before making a purchase include all of the following except: Kelly Blue Book (KBB) the Internet their insurance company Edmunds a dealer's newspaper ad
a dealers newspaper ad
Which of the following is not associated with credit cards? A grace period A finance charge An annual fee Convenience users and borrowers A down payment on a home
a down payment on a home
All of the following are deposit institutions except A commercial bank. A credit union. A finance company. A mutual savings bank. A savings and loan association.
a finance company
What is not a legal option for high-income consumers?
a legal aid society
A drawback of a regular savings account is
a low rate of return
Amber wants to open an account, but she doesn't know which kind is appropriate. She is interested in earning a higher interest rate and plans to keep at least $1,000 in her account so she can avoid paying a fee. Amber wants to open her account at an investment company and understands that her account will not be covered by federal deposit insurance. What kind of account should she open?
a money market fund
What is an example of closed-end credit?
a mortgage loan
Which financial institution will likely provide the most expensive loans?
a payday loan company
A prearranged loan for a specified amount that a consumer can use by writing a special check is known as
a revolving check credit
short sales are
a sale where the owner of a home owes more on the mortgage than the home is now worth.
According to the e-reserves article, Financing Your First Wheels,author Jessica Anderson explains that you will be more attractive to a car lender if you have
a solid credit history.
According to the e-reserves article, Credit Advice You Can Trust, author Laura Cohn suggests that if your credit report has been hurt by inaccurate information, you should
alert the credit-reporting agency on your own.
The Truth in Savings Act requires financial institutions to disclose the _____ on savings accounts.
annual percentage yield
When someone buys a house, the mortgage company will usually conduct a(n)
appraisal
According to the e-reserves article, Financing Your First Wheels,author Jessica Anderson explains that you will be more attractive to a car lender if you
bring a sizable down payment, such as a minimum of 20%, to the "negotiating table".
If you have an interest rate subsidy from a home builder or real estate developer, you have a:
buy-down
Under Chapter 7 of the U.S. bankruptcy code,
certain assets receive some protection
Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?
chapters 7 and 13
Madeline wants to purchase a larger house. However, she has not yet sold her current home. She may want to include a(n) ________ in her offer.
contingency clause
A form of housing in which shareholders purchase stock to obtain the right to live in a unit of the building:
cooperative housing
According to the e-reserves article, What You Need to Know About Credit Scores author Jessica Anderson notes that no matter which credit score you use, they will all indicate your
creditworthiness to a lender
What is the document that transfers ownership of property from one party to another?
deed
Following the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, debtors seeking to erase all debts will have to wait ___ year(s) from their last bankruptcy before they can file again.
eight
True or False: According to the e-reserves article, Financing Your First Wheels,author Jessica Anderson notes that when attempting to borrow money for a used car, it may be easier to get a loan from a credit union or bank than through a dealer.
false
True or False: According to the e-reserves article, What You Need to Know About Credit Scores author Jessica Anderson, all free credit reports will give you your credit score at least once a year.
false
Most products come with some guarantee of quality. This type of warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
full warranty
According to the article, Digital Budgets for Everyone, consumers should be knowledgeable about safeguards being used by money-management sites before disclosing any personal information. Mint.com is regularly spot-checked by Intuit who sends out "white knights" to test the security and spot where there is room for security improvements on the Mint.com site. "White knights" are also known as
good-guy hackers
home equity loans
have interest that is tax-deductible
Lonnie wanted to sell his house but didn't know what price to ask. He should consider all of the following EXCEPT: -Current mortgage rates. -Demand in the housing market. -His original cost. -Recent selling prices of comparable homes in the area. -The appraised value of his home.
his original cost
If you miss payments on a home equity loan, you can lose your
house
Most products come with some guarantee of quality. This type of warranty covers the product's intended use or other basic understandings that are not in writing.
implied warranty
A certificate of deposit that has earnings based on the stock market is called an
indexed CD
Which of the following is not an economic factor associated with consumer buying influences?
lifestyle
Most products come with some guarantee of quality. This type of warranty covers only certain aspects of the product, such as parts.
limited warranty
a credit card is a type of
loan/borrowing
When Sam applied for a loan, he was assured that his rate would not change if he closed within 30 to 90 days. Sam had a(n) ______ on the interest rate.
lock
According to the e-reserves article, The Small Ways Wealth Begets Wealth, by not using more than 20% or 30% of your available credit on your credit card, you will reap all the following benefits except: A. a better credit score B. lower interest rates when you take out a mortgage C. lower interest rates when you take out a car loan D. lower bank fees when you miss your monthly credit card payment E. lower interest rates when you set up a home equity loan
lower bank fees when you miss your monthly credit card payment
If a money-management website, such as Mint.com, is hacked and your banking information is compromised resulting in a personal financial loss, your bank
may not be legally responsible for recovering your cash
A process used to settle grievances in a non-binding process is called a(n)
mediation
A vehicle lease has several costs. Which is the interest rate used to calculate the monthly cost?
money factor
debt payments to income ratio=
monthly debt payments/ monthly net income
When calculating the debt-to-equity ratio, which of the following is NOT included: credit card balances. net worth Auto loan balances. Mortgage balance. Installment debt
mortgage balance
when a potential buyer loves the layout of the home but does not like the carpet or paint, they should:
negotiate allowances along with your offer to purchase
After graduation (or falling below half time load), how long before you must start repaying the balance of your Perkins Loan?
nine months
According to the e-reserves article, Credit Advice You Can Trust, author Laura Cohn states that legitimate credit-counseling agencies will do all of the following, EXCEPT: A. educate you about budgeting B. offer to negotiate with your creditors. C. help you set-up a debt management plan D. help you understand how to use credit E. help you find them easily through a listing with the Association of Consumer Credit Counseling Agencies.
offer to negotiate with your creditors.
This shopping label is used primarily on perishable products.
open dating
According to the car buying "field trip" video, the most common mistake a person can make when purchasing a vehicle is
over-extending themselves and taking on too much debt
Which of the following is often considered to offer the least expensive loans (loans with low interest)?
parents or family members
Which of the following is NOT a valid reason for borrowing? Borrowing for a college education. Paying for everyday living expenses. Buying a car so a homemaker can return to work. Paying for a medical emergency.
paying for everyday living expenses
Yvette has a flexible-rate mortgage that limits the amount to which her monthly payments can rise. This feature is called a(n)
payment cap
A vehicle lease has several costs. Which is the amount paid monthly and the number of payments?
payment schedule
Properly maintaining and operating the product is part of the ____ phase of the research-based buying process.
post-purchase activities
interest=
principal x rate x time
earnings on savings can be measured by the
rate of return
A partial refund of the price of a product is called a
rebate
opportunity cost=
required minimum balance x interest rate
A vehicle lease has several costs. Which of the following is the expected value at the end of the lease?
residual value
Zoe signed the back of her check with the words "for deposit only." She used a
restrictive endorsement
A no-haggling dealer presents the price of a new car to be accepted or rejected as stated and is called a ___ dealer.
set price
After graduation (or falling below half time load), how long before you must start repaying the balance of your Stafford Loan?
six months
Information about a personal bankruptcy may be reported in your credit file for
ten years
According to the car buying "field trip" video, before a contract to purchase a vehicle is signed, the salesperson reviews all of the following with the customer, except the loan term the total of all monthly payments that will be made on the vehicle the monthly payment on the vehicle the car insurance coverage the interest rate on the loan
the car insurance coverage
According to the car buying "field trip" video, lease payments are based on
the vehicle's residual amount
All of the following are benefits of money-management websites, such as Mint.com, except: A. they will keep you from spending any money on frivolous items B. they will create a debt-repayment plan based on what you can afford per month C. they will show you how much in interest you are paying D. they will show you how much time and money you will save compared with making only minimum payments E. they will show you the date you will be debt-free
they will keep you from spending any money on frivolous items
operating cost per mile=
total operating costs/ annual mileage
True or False: According to the e-reserves article, What You Need to Know About Credit Scores, author Jessica Anderson explains that each credit bureau may use a different scoring model to rate your credit other than the FICO scoring model.
true
A standard measurement used to compare the prices of packages of different sizes is
unit pricing
According to the e-reserves article, The Small Ways Wealth Begets Wealth, all of the following are benefits to having accumulated wealth except: A. you may be able to purchase a vehicle with cash B. you will able to put less than 5% down payment on a home, thereby avoiding private mortgage insurance C. you may be able to put a large down payment on a vehicle, thus reducing your monthly payment obligation D. you will have a higher tolerance for financial risk, therefore reducing the need for various insurance policies E. you may raise the deductible on your homeowner's insurance policy, therefore paying more out-of-pocket in the event of storm damage
you will able to put less than 5% down payment on a home, thereby avoiding private mortgage insurance
According to the e-reserves article, The Small Ways Wealth Begets Wealth, author Jonathan Clements suggests that by stashing away a small amount of money each month, beginning in your 20's, will have substantial savings down the road. The suggested amount to begin saving per month is
$100 - $200
amount available for borrowing=
(maximum loan percent x current market value) -current loan
If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about:
1.0
If Vince charged $200 on his credit card with 18% APR and he paid his balance in full within the grace period, how much was he required to pay?
200. no interest during grace period
FICO scores generally range from
350 to 850
If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within______ of notification that your credit application has been denied.
60 days
If you are selling your house by owner, you should still enlist the assistance of:
A lawyer or title company to assist with the contract, closing, and other legal matters.
The consumer buying matrix is designed to do all of the following, except: Allow a consumer the opportunity to evaluate a buying decision without using mathematical concepts Allow a consumer the opportunity to add their own attributes Allow a consumer to evaluate the pros and cons of a purchase Formalize the decision process Quantify the decision process
Allow a consumer the opportunity to evaluate a buying decision without using mathematical concepts
