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Personal Finance: Home & Automobile Buying Decision
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The three main similarities between mortgages and car loans are that both are: Installment loans. Types of secured loan. Have a fixed payment period

Personal Finance: Home & Automobile Buying Decision
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25 Questions

1. What questions should you answer before deciding to purchase a house?
2. The Internet can help you research neighborhoods and find a community in which you'd like to live.
3. You have just obtained a mortgage to purchase your home- The ________ that you paid to obtain the loan are charges that must be paid at the time of the sale and serve to raise the effective cost of the loan.
4. How much would the monthly payment be on a mortgage of $250,000 for 30 years at a rate of 6.0%?
5. Leasing a car may make sense if you drive over 25,000 miles a year.
6. For most cars, the manufacturer's warranty extends through the first seven years of ownership or the first 70,000 miles, whichever comes first.
7. PITI is a one-time, initial cost of home ownership.
8. You have an option on an ARM that has a two-year adjustment interval, 4% margin, 2% periodic rate cap and a 6% lifetime cap- The current initial rate is 5.35%- You can also get a 30-year, fixed-rate mortgage for 6.65%- You plan on staying in this home for at least 10 years. What would be your best choice?
9. For many consumers, a good school district is an important consideration when purchasing a home.
10. What drawbacks might a co-op have over a house for a family of eight who are relocating to a new area and need to purchase a home?
11. An assessment is a voluntary contribution by the condominium owners.
12. What are some tips on making a complaint to a company?
13. Smart buying means enjoying the highest standard of living that you can based on your income and budget.
14. If you are the type of person who wants complete control over the style and decoration of your home, then a condominium or cooperative would be an appropriate housing decision for you.
15. Which of the following is not an advantage of living in a condo?
16. With private mortgage insurance, many lenders will allow you to borrow more than 80% of the appraised value of the home- What is the purpose of this action?
17. Evaluating whether you need or simply want a sun roof is an example of using the smart buying steps.
18. Subprime mortgages are mortgages taken out by people with low credit scores.
19. The first step at the car dealership is to negotiate the best price that you can on the car that you need.
20. Abigail is financing her first home- She is borrowing $125,000- Her bank is loaning her the money for 15 years at an APR of 5.7%- What will Abigail's monthly mortgage payment be?
21. You have been having significant problems with your new car- Every time you turn around something is breaking or not working properly- Fortunately, the 'lemon laws' are there to help. Which of the following is not one of the criteria for application of the lemon laws?
22. What kind of valuable information can you find online at websites such as Edmunds.com or Autosite.com concerning smart buying for automobiles?
23. Which of the following housing alternatives puts the responsibility for maintenance and repairs on the occupant?
24. You are planning on starting your own business in 18 months and you intend to purchase a new home- You have looked carefully at your budget and have determined that you can afford a PITI of $900 per month- Your banker has told you that you can easily qualify for a PITI of $1,150 per month- Which of the following is the most reasonable explanation for this discrepancy?
25. A mortgage with an APR higher than normal is a subprime mortgage.

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