SUPA personal finance
lenders do not want mortgage payments to exceed ____ percent of your gross monthly income
25-30%
When an S&L is a mutual association, it means that it is owned by the
Depositors
most important rule for establishing a savings plan is to
Establish a regular pattern of saving
Commercial banks are insured by the
FDIC Federal Deposit Insurance Corporation
Interest rates on credit cards tend to be lower than most other forms of consumer credit
False
Nearly all credit cards have annual fees.
False
There are penalties for early withdrawal of funds from CDs
False
Using credit is the ideal way to provide for financial emergencies
False
debt safety ratio of 5% would generally be a signal of financial trouble ahead.
False
The largest investment you will make in your lifetime will probably be the purchase of an auto
False- a home is the most costly
Bank credit card purchases always begin accruing interest charges immediately
False- there is usually a grace period
Money Market Deposit Accounts are typically
Federally insured
The financing rate on the car you are leasing is called the
Money factor/rate of interest
could be deducted on your Federal income taxes
Mortgage interest
A fee charged as a condition of a mortgage loan that raises the interest rate is called
Mortgage points
A financial advantage of renting compared to purchasing housing is a
Need for down payment
Saving accounts are NOT referred to as demand deposits
True
The greatest fixed cost involved with owning an auto is usually the monthly loan payments
True
The purpose of a credit report is to evaluate the kind of risk you pose to the lender
True
credit limit refers to the max amount the cardholder can owe the issuer at any point in time.
True
Paying a loan off much quicker than scheduled is one way to build a good credit rating
True and false
As a percent of take-home pay, monthly consumer credit payments should not exceed
20%
Factors typically influencing the choice of where to maintain a checking account are
Convenience, services, and cost
Open account credit is characterized by
A monthly credit statement
What is not an interest-bearing account (doesn't provide high-interest rates)
A regular checking account
A company that offers direct deposit of her paycheck. This service is called
An EFT service
If you write a check for an amount greater than your account balance, the result will be
An overdraft
All of the following are useful ways to build a strong credit rating except
Apply for a long term loan and make late payments
______ are not a type of open account credit.
Bank debit cards
The price of the car you are leasing is called the
Capitalized cost
The down payment on the car you are leasing is called the
Capitalized cost reduction
Which earns a higher rate of interest on a certificate of deposit than on a checking account.
Certificate of deposit
The lender uses a credit application to determine if the borrower has the ____ to handle the debt
Character and capacity
The following are major sources of home mortgages
Commercial banks, thrift institutions, and credit unions
Credit union members are expected to have some
Common bond
If interest rates and monthly mortgage payments will not change over the life of your mortgage This is called a
Fixed rate mortgage
The ___ is really a second mortgage on your home
Home Equity Line of Credit
The majority of each monthly payment at the beginning of the loan goes to pay
Interest
Variable auto ownership costs are most dependent on
Mileage driven
The Annual Percentage Yield is the same as the
Nominal rate
____ is a reason for owning your own home.
Pride of ownership, a sense of stability, and a tax shelter
____ is an ongoing cost of homeownership.
Property taxes
____ could be deducted on your Federal income taxes
Real estate taxes
All of the following are key items lenders look at in granting credit except
Religious affiliations
Persons with very poor credit ratings can still get
Secured credit cards
Lower interest rates on certificates of deposit are associated with
Shorter maturities
The highest average cost housing to purchase would be a
Single family home
the first choice in housing in the United States is a
Single family home
A closed-end automobile lease is the most popular type of lease
True
A debt safety ratio of 25% might be a signal of financial trouble ahead.
True
An automobile is a personal use asset for most buyers
True
Automobiles tend to decrease in value over time
True
Bank credit cards represent the most common kind of open account credit
True
Capitalized cost on an auto lease is the same as the price of the car
True
FDIC covers stocks, bonds, and mutual funds are NOT purchased at banks.
True
Gasoline is a variable cost of automobile ownership
True
Individuals with better credit ratings usually can secure higher credit limits
True
A _____ does not represent a line of credit
debit card
The loss of value in a car over time is called
depreciation
Credit Unions are
mutual associations.
A credit card can provide an interest-free loan if you
pay the entire balance on or before the due date
The seller of the house typically pays the
real estate agent's commission
