Personal Finance Ch. 12 Real Estate

ARM mortgage is bad for a consumer because...

• the interest rates can increase significantly over time
• it offers more stability compared to fixed-rate mortgages
• the interest rates remain fixed for the entire term

A Fixed Rate is...

• A set interest rate that does not change

• A rate that is only applicable for a short period of time
• A rate that is determined by the borrower's credit score

This is the best example of an inflation hedge.

• Real estate
• Stocks
• Gold

A mortgage is used to pay for a...

• car
• college tuition
• property

The Principal of a purchase is...

• The amount of money after interest is added.
• The amount of money after fees are deducted.
• Initial amount of money before any interest or fees are added.

Real estate agent sells...

• Cars
• Properties
• Clothing

When purchasing a house you should look for...

• Number of bathrooms and on the higher price range

• Location, size, condition

• Distance from the nearest park and better schools

One advantage of renting a home is...

• Long-term investment
• Flexibility
• Permanent residence

A 30 year mortgage is easy to pay off early.

• True

• False

The best time to refinance a house is when....

• interest rates are lower than your current rate,

• you plan to move out of the house soon
• interest rates are higher than your current rate