Personal Finance Quiz 1

Identify all 4 parts of a Mortgage. (SELECT 4)

• Principle

• Property Taxes

• Homeowner's Insurance

• Interest

• Social Security

When do you have to pay PMI?

• When you pay less than 20% on your down payment

• When you are done paying off your mortgage

• When you invest in the stock market

• When you pay less than 5% on your down payment

What is one advantage of a 30-year mortgage over a 15-year mortgage?

• Lower monthly payments

• Lower Interest

• You pay it off sooner.

What is one advantage of a 15-year mortgage?

• You have lower monthly payments than a 30-year

• You have more money left over to invest or for emergencies.

• You pay less total interest on your loan.

What is one advantage of buying a home over renting?

• You will build equity in your house.

• You never have to take care of the lawn.

• You will never have any repairs to worry about.

The bigger the down payment you make on your home...

• The lower your monthly payment will be.

• The higher your monthly payment will be.

Be sure that your monthly payment on your mortgage is LESS THAN _____ percent of your monthly gross income.

• 30

• 50

• 60

• 90

A mortgage is a loan for a _____.

• car

• home

• motorcycle

The_______ you owe on the mortgage is the fee you pay the bank for borrowing its money.

• Interest

• Principle

• PMI

• Property Taxes

When writing a check, always include the month, day, and year when writing the date.

• True

• False