Money Matters Chapter 8

Which of the following is true of an FHA mortgage loan

• It allows for a smaller down payment

• It requires you to pay a monthly mortgage insurance premium

• It is backed by the Federal Housing Administration (FHA)

• All of these are true

A lease payment on a car is typically much more than a monthly car loan payment.

• True

• False

Before financing a vehicle, you should comparison shop for the best interest rate and get preapproved for a loan before you go to the dealership.

• True

• False

Long-term debt is a loan that is payale over a period longer than a year.

• True

• False

Advantages of buying a home instead of renting include tax benefits and building ________________________.

• equity

• amortization

• credit history

• interest

A _______________________ is used to determine a person's creditworthiness and the interest rate they qualify for...the higher it is , the better their interest rate will be.

• downpayment

• credit score

• amortization

• loan-to-value

Which of the following is justifiable reason for not refunding a tenant's security deposit?

• holes in the walls

• normal wear and tear of premises

• excessive noise

• none of these

Besides price and downpayment, what should you consider before financing a vehicle?

• How much interest you will have to pay on the loan

• Add-ons like Sirus radio

• Color of the vehicle

• How much it will costs to clean the vehicle

A rule of thumb for determining if you have an acceptable amount of installment loan debt states that it should not exceed.

• 20%

• 25%

• 30%

• 50%

Long-term debt is a loan that is payale over a period longer than a year.

• True

• False