Your Money and Credit Chapter 5

the miles covered by the automobile

Variable auto ownership costs are dependent on:

condominium

When you receive title to an individual unit and a joint ownership of any common areas and facilities, you have purchased a:

Interest and real estate taxes

Which of the following are tax deductible if one itemizes deductions?

The cost of automobile insurance

Which of the following is a fixed auto ownership cost?

set right in advance any problems on his credit report

With pre qualification, a buyer can

experienced a negative amortization

You made a $900 mortgage payment. The interest of $925 on the mortgage for this month leads to an increase in the principal balance. You have

a negative equity

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

property taxes and insurance

are ongoing costs of home ownership.

financing made available by a builder or seller to a potential new-home buyer at well below market interest rates, often only for a short period.

A buydown refers to:

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

A foreclosure happens when:

the amount you have paid as an earnest money deposit

A real estate sales contract will include:

loan-to-value

A(n) _______________ ratio specifies the maximum percentage of the value of a property that a lender is willing to loan.

when the mileage limits are exceeded

Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only

a closed-end

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.

real estate short sale

Fredrick purchased a property worth $150,000 on mortgage. He had paid $30,000 as a down payment on this property. However, because of a recent slump in the real estate prices, the property is worth only $110,000, forcing Fredrick to sell the property. Assuming that no mortgage payments have been made by Fredrick, this sale is termed a(an) _____.

$20,000

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80 percent, then the borrower must make a down payment of at least _____

Private Mortgage insurance

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

$990

If you purchase a house worth $110,000 and make a 10 percent down payment, how much would 1 mortgage point cost at closing?

$1,350

If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you

$3,332

Jackie is in the 28 percent marginal tax bracket and has no other itemized deductions except those related to her home. If she is eligible for a standard deduction worth $6,100 and she incurs the following costs related to housing, how much tax savings will she receive as a result of her home purchase?

closed-end lease

Jacob has taken an SUV on lease from Free Cruisers Inc. for a period of four years. Jacob does not need to pay any extra amount, based on the residual value of the car, at the end of the fourth year. He has a _____.

$12,528

Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7 percent, 4-year loan from a credit society, what is the maximum loan amount Jana can afford? (Round off the answer to nearest units place.)

$17,028

Kurt has $4,500 for a down payment and thinks he can afford monthly payments of $300. If Kurt can finance a vehicle with a 7 percent, 4-year loan from the automobile dealer, what is the maximum amount he can afford to spend on the car? (Round off the answer to nearest units place.)

pre qualification

Matt is considering the purchase of a condo on a mortgage. However, he is not sure of the amount of the mortgage he is eligible for. will help him identify and correct any problems such as credit report errors that may arise on his application.

renting a home

Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months. Based on this information, which of the following housing recommendations would be most appropriate for them?

true

Prequalification provides a home buyer with information regarding the specific mortgage amounts he or she is eligible for subject to the expected changes in interest rates.

insurance

The Federal Housing Administration _____ to high loan-to-value ratio mortgages.

Real Estate Settlement Procedures Act

The _____ governs closings on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.

loan payments

The biggest fixed cost of owning a car is likely to be the

false

The job of a mortgage banker is to locate conventional loans for clients.

interest

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

a negative amortization

The monthly interest on your adjustable-rate mortgage was $690. You paid $650 as your monthly payment on the loan leading to an increase in the principal balance. This is an example of:

capitalized cost

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

true

The property listing in a local multiple listing service (MLS) cannot be accessed by all buyers and sellers.

the seller

The real estate agent's commission is generally paid by