PFIN 6th Edition by Billingsley - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below 1. Lowballing is a sales technique where the salesperson quotes a low price for a car to get you to make an offer, and negotiates the price upward prior to signing …
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PFIN 6th Edition by Billingsley – Test Bank
Instant Download – Complete Test Bank With Answers
Sample Questions Are Posted Below
1. Lowballing is a sales technique where the salesperson quotes a low price for a car to get you to make an offer, and negotiates the price upward prior to signing the sales agreement.
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2. In a co-op, the buyer receives title to a unit and joint ownership of the common areas.
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3. The market price of a house is $125,000, and the home buyer borrows $100,000. Two points are equal to $2,000.
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4. The property listing in a local multiple listing service (MLS) cannot be accessed by all buyers and sellers.
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5. Prequalification provides a home buyer with information regarding the specific mortgage amounts he or she is eligible for subject to the expected changes in interest rates.
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6. The job of a mortgage banker is to locate conventional loans for clients.
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7. Variable auto ownership costs are dependent on:
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8. Which of the following is a fixed auto ownership cost?
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9. The loss in the value of an automobile over time is called:
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10. The first step in the auto-buying process should be:
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11. Henry has $2,500 for a down payment and thinks he can afford monthly payments of $400. If he can finance a vehicle with an 8 percent, 3-year loan from a local bank, what is the maximum amount Henry can spend on the car? (Round the answer to the nearest units place.)
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12. Kurt has $4,500 for a down payment and thinks he can afford monthly payments of $300. If Kurt can finance a vehicle with a 7 percent, 4-year loan from the automobile dealer, what is the maximum amount he can afford to spend on the car? (Round off the answer to nearest units place.)
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13. Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7 percent, 4-year loan from a credit society, what is the maximum loan amount Jana can afford? (Round off the answer to nearest units place.)
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14. Which of the following is true of buying a used car as compared with a new car?
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15. A behavioral bias in which an individual tends to allow an initial estimate (of value or price) to dominate the subsequent assessment (of value or price) regardless of new information to the contrary is called _____.
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16. Jacob has taken an SUV on lease from Free Cruisers Inc. for a period of four years. Jacob does not need to pay any extra amount, based on the residual value of the car, at the end of the fourth year. He has a _____.
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17. The price of the car you are leasing is called the:
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18. At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have _____ lease.
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19. Which of the following is a type of down payment that lowers the potential depreciation and therefore your monthly lease payments on a leased car?
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20. When shopping for a lease, you want:
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21. The financing rate on a lease similar to the interest rate on a loan is called the _____.
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22. When you receive title to an individual unit and a joint ownership of any common areas and facilities, you have purchased a:
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23. Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months. Based on this information, which of the following housing recommendations would be most appropriate for them?
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24. A foreclosure happens when:
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25. _____ is a situation where homeowners owe more to the lenders than what their properties are worth.
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26. When you lease your apartment from a nonprofit corporation that owns the building and you own a share of the nonprofit corporation, you own:
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27. As home prices have fallen in recent years, the rent ratio:
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28. If you made a down payment of $11,000 on a house worth $110,000, the lenders will require _____ because of the size of the down payment.
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29. Fees charged by lenders as a condition of a mortgage loan that raises the effective rate of interest are called:
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30. If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80 percent, then the borrower must make a down payment of at least _____
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31. An escrow account is used to collect _____ from one’s monthly mortgage payment.
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32. Barb and Bob want to purchase a new home but don’t know how much mortgage they can qualify for. The lender requires that the total installment of loan payments do not exceed 35 percent of the monthly income. Based on Barb and Bob’s financial data given below, what is the maximum monthly mortgage payment for which they can qualify?
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33. The majority of each monthly payment at the beginning of the loan goes to pay the:
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34. If you purchase a house worth $110,000 and make a 10 percent down payment, how much would 1 mortgage point cost at closing?
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35. Which of the following are tax deductible if one itemizes deductions?
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36. Most homeowners get financial benefit from owning a home as it results in:
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37. _____ are the expenses that borrowers pay when a mortgage loan is closed and they receive title to the purchased property.
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38. Jackie is in the 28 percent marginal tax bracket and has no other itemized deductions except those related to her home. If she is eligible for a standard deduction worth $6,100 and she incurs the following costs related to housing, how much tax savings will she receive as a result of her home purchase?
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39. If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 90 percent, then the borrower must make:
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40. A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).
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41. A real estate sales contract will include:
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42. The data in a multiple listing service (MLS):
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43. The _____ governs closings on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.
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44. Fredrick purchased a property worth $150,000 on mortgage. He had paid $30,000 as a down payment on this property. However, because of a recent slump in the real estate prices, the property is worth only $110,000, forcing Fredrick to sell the property. Assuming that no mortgage payments have been made by Fredrick, this sale is termed a(an) _____.
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45. Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson’s Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called _____.
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46. Which of the following will help a buyer know ahead of time the specific mortgage amount that he or she will be eligible for subject to changes in rates and term?
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47. If the interest rates and monthly mortgage payments do not change over the life of your mortgage, you have _____.
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48. The monthly interest on your adjustable-rate mortgage was $690. You paid $650 as your monthly payment on the loan leading to an increase in the principal balance. This is an example of:
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49. A buydown refers to:
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50. The Federal Housing Administration _____ to high loan-to-value ratio mortgages.
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51. _____ are loans offering low payments for the first few years, gradually increasing until year three or five, and then remaining fixed.
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| 52. The biggest fixed cost of owning a car is likely to be the ____________.
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| 53. Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only ____________.
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| 54. Janet is considering the purchase of a condo for $150,000 during a recession phase, partly financed by a mortgage. She is due to retire in a few years. If she cannot make her mortgage payments on time, she is bound to incur a ____________.
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| 55. The purchase price of the house you are buying is $140,000. A loan-to-value ratio of 80 percent will require a down payment of ____________.
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| 56. ____________ are ongoing costs of home ownership.
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| 57. If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you ____________.
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| 58. A(n) ____________ ratio specifies the maximum percentage of the value of a property that a lender is willing to loan.
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| 59. The seller of the house typically pays the ____________.
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| 60. Earnest money is the sum of money the home buyer pledges with the ____________.
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| 61. The ____________ Act governs closings on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.
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| 62. The Real Estate Settlement Procedures Act governs ____________ on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.
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| 63. Matt is considering the purchase of a condo on a mortgage. However, he is not sure of the amount of the mortgage he is eligible for. ____________ will help him identify and correct any problems such as credit report errors that may arise on his application.
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| 64. With prequalification, a buyer can ____________.
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| 65. The real estate agent’s commission is generally paid by ____________.
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| 66. A financing made available by a builder or seller to a potential new-home buyer at interest rates well below market interest rates, often only for a short period is termed as a ____________.
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| 67. A veteran might be able to buy a home with no down payment with ____________.
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| 68. You made a $900 mortgage payment. The interest of $925 on the mortgage for this month leads to an increase in the principal balance. You have ____________.
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69. Greg has negotiated a $20,000 price on a new pickup truck. The manufacturer is offering a $1,500 rebate or 3.9 percent, three-year financing. Greg is also able to get 7 percent, three-year financing from his credit union. If Greg plans to finance $18,000 over three years, should he take the 3.9 percent financing or the 7 percent financing? Show all work and round your answers to two decimal places.
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70. Judy has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400. If lenders are currently offering 6 percent interest on 5-year loans, what is the maximum price Judy can pay for a vehicle?
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71. Leslie has been offered the choice of either a $1,000 rebate or a 5.5 percent, 48-month loan for the new car she is purchasing. If Leslie will be financing $15,000 and can get a 7.5 percent, 48-month loan at her credit union, should she take the $1,000 rebate or the 5.5 percent loan? (Show all work.)
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72. Dick and Jane have just purchased a house and are calculating how much money they will need when the closing day rolls around. The purchase price is $200,000. They will make a 20 percent down payment, and they must pay 2 points on the loan. Closing costs should be 3 percent of the purchase price. What is the total dollar amount they will need at closing? (Show all work.)
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Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
