PF 7.3 Auto Loans & Mortgages

The larger your down payment amount, the __________ your monthly payments.

(a)  

• smaller
• larger
• decrease

The higher your credit score is, the (a)   your APR.

If you buy a $180,000 house and you take out a $150,000 mortgage, how much was your down payment?

(a)  

A(n) ​ (a)   requires a more extensive look at your credit history, usually from all three credit bureaus while a(n) ​ (b)   will typically only look at one.

• mortgage loan
• auto loan
• personal loan
• student loan
• credit card
• payday loan

A(n) ​ (a)   has a shorter term, usually 3, 5, or 7 years while a(n) ​ (b)   has longer terms, usually 15 or 30 years.

• auto loan
• mortgage loan
• personal loan
• student loan
• credit card
• payday loan

While lenders will usually reject a(n) ​ (a)   application if it includes a poor credit history, they are more likely to approve a(n) ​ (b)   to help increase sales.

• mortgage loan
• auto loan
• personal loan
• student loan
• payday loan
• business loan

How do lenders alter the loan terms of a loan for those with poor credit to make up for the added risk?

• By decreasing the interest rate
• By increasing the interest rate, requiring a co-signer, or reducing the loan amount.
• By requiring a higher credit score
• By extending the loan term

What are the first steps that you should take when struggling to pay secured debt?

• Avoid contacting the lender and hide from the situation
• Borrow more money to pay off the debt
• Assess financial situation, contact lender, seek advice from professional if needed
• Ignore the debt and hope it goes away

What are the potential consequences of not paying your loan?

• Repossession of collateral

• Legal action

• Damage to credit score

• Increased interest rates

• Nothing, just get another loan

If the total cost of a home is $300,000 and the buyer is required to make a 20% down payment, how much is the down payment?

• $50,000

• $60,000

• $70,000

• $80,000