Personal Finance Final Exam Part 2 Review

What is the down payment required for most conventional loans (for non first-time buyers)?

• 3.5%

• 5%

• 7%

• It depends on the person’s credit score.

Stewart and Martha have been married for a few years and have decided to buy a house. They must first prequalify for a loan. What exactly does that mean?

• The bank will determine if they are eligible for a loan based on their current residence.

• The bank will determine if they both qualify for a loan or if only one of them qualifies.

• The bank will determine the amount it is willing to loan them based on their income and credit scores.

• The bank will determine the amount the house is worth and will decide their loan amount based on that value.

Russell enjoyed a manageable house payment for the first three years of owning a home. However, his payment went up about $65 last year and $130 this year. Which of the following types of interest rate structures does Russell have on his mortgage?

• Fixed-rate mortgage

• Adjustable-rate mortgage

• Depreciating-rate mortgage

• FHA-rate mortgage

Which of the following is not a main cost associated with home ownership?

• Utility bills

• Homeowner’s insurance

• Health insurance

• HOA fees

• Property tax

Which two factors determine the amount of money a person is required to pay the government in taxes?

• Her marriage status and gross income

• Her number of dependents and adjusted gross income

• Her exemptions and taxable earnings

• Her filing status and taxable earnings

• Her taxable earnings and adjusted gross income

Earned income + unearned income - deductions =

• Gross income

• Adjusted gross income

• Taxable income

• Net income

Which form do you use to declare your earnings and tax obligation to the IRS when you are filing your taxes?

• Form 1040

• Form W-4

• Form 1099

• Form W-2

Which form do you get from your employer by January 31 that shows your earnings and withholdings from your paychecks?

• Form 1040

• Form W-4

• Form 2020

• Form W-2

When are income taxes due normally (unless the date falls on a weekend)?

• January 1

• April 15

• December 31

• It depends on the state you live in.

Who are credit card companies’ most profitable customers?

• Customers who pay their full balances each month

• Customers that never pay on time, if at all.

• Customers that pay the minimum payment each month.

• Customers that they have to send to a collection agency.