borrowing/credit

Question 1

Repaying a loan over a ___ can generally reduce the total amount of interest and fees a borrower has to pay on top of the principal.

Answer 1

shorter period of time

Question 2

Borrowing less money means paying back ___ and ___ charged on that principal

Answer 2

less principal and less interest

Question 3

Making ___ reduces the amount of money the person needs to borrow, which reduces the overall cost of a loan

Answer 3

large down payment

Question 4

Lenders may adjust the price of a loan based on ___ they believe it to be

Answer 4

how risky

Question 5

legal concept describing a financial agreement whereby an asset or money is held by a third party on behalf of two other parties that are in the process of completing a transaction

Answer 5

escrow

Question 6

cost of reducing APR on your loan; 1 point = 1 percent of the loan

Answer 6

points

Question 7

loan processing, paperwork, title transfer: 2-5% of the purchase price

Answer 7

closing cost

Question 8

payment toward the offer to show you are serious (seller keeps it if you back out of deal) 1-3% of sale price

Answer 8

earnest money

Question 9

Interest rate changes periodically in relation to the prime/current market rate

Answer 9

ARM (Adjustable Rate Mortgage)

Question 10

Interest rate is fixed throughout the duration of the mortgage

Answer 10

fixed rate mortgage

Question 11

for people with poor credit and low down payment; must pay mortgage insurance

Answer 11

Federal Housing Administration insured loan (FHA Loan)

Question 12

Shop around for best interest rate, fees, other costs

Answer 12

banking institution

Question 13

annual fees, interest rate, limits and penalties

Answer 13

cost of credit card

Question 14

Stores, retailers, and merchants must pay a fee to ___

Answer 14

accept cards

Question 15

1-4% fees for business to ___

Answer 15

accept credit card

Question 16

0.5-1% fees for business to ___

Answer 16

accept debit card

Question 17

amount of time between billing date and due date

Answer 17

grace period

Question 18

credit score is also known as a ___, because lenders use it to determine how likely it is that a potential borrower will repay a loan

Answer 18

risk assessment score

Question 19

credit score is based on ___ in your credit report

Answer 19

credit account information

Question 20

credit score is ___ of the likelihood you’ll successfully repay a future loan

Answer 20

numerical forecast

Question 21

Credit scores tend to ____.

Answer 21

drop more quickly than they rise

Question 22

Must provide Finance Charge and Annual Percentage Rate
$50 liability

Answer 22

Truth in lending act

Question 23

Cannot refuse credit on the basis of race, color, religion, gender, marital status, age or national origin

Answer 23

equal credit opportunity act

Question 24

Check accuracy of credit reports; fix inaccurate data on report

Answer 24

fair credit reporting act

Question 25

Fix any errors on your credit card bill

Answer 25

fair credit billing act

Question 26

Prohibits harassment, threatening calls, abusive conduct

Answer 26

fair debt collection practices act

Question 27

one free credit report each year from the 3 credit bureaus

Answer 27

fair and accurate credit transactions act (FACT act)

Question 28

provide consumer protection to whose using ATM and debit card; limits liability when card is lost or stolen

Answer 28

electric fund transfer act

Question 29

principal, cost of loan, and duration

Answer 29

part of loan

Question 30

Experian, TransUnion, Equifax

Answer 30

credit bureaus in U.S.

Question 31

How you pay your bills, balance, credit history length, type of credit

Answer 31

areas that makes up credit score

Question 32

what part of credit weights the most

Answer 32

payment history

Question 33

good credit score

Answer 33

670 or higher

Question 34

renting apartment, getting job, getting good insurance rates

Answer 34

credit score impact in life

Question 35

borrowing money and paying it back in fixed monthly payment over time

Answer 35

installment loan

Question 36

no collateral, based on creditworthiness, higher interest rate

Answer 36

unsecured loan

Question 37

who decided if you get credit or not

Answer 37

lender

Question 38

lender decide rather you get credit or not based on ___

Answer 38

creditworthiness and their own rules

Question 39

If you pay your credit card in full every month, what are you known as to credit card companies

Answer 39

transactor

Question 40

____ are called mortgage

Answer 40

home loan

Question 41

conventional loans, FHA loans, and VA loans

Answer 41

types of home loan

Question 42

To protect the buyer’s good faith deposit so the money goes to the right party according to the conditions of the sale. To hold a homeowner’s funds for property taxes and homeowners insurance

Answer 42

purpose of escrow