Chapter 6 Flashcards
The cost of credit, as expressed in a percentage is the _____.
APR.
_____ is a form of security to help guarantee that a creditor will be repaid.
Collateral.
_____ is the income that a person receives after taxes and deductions.
Net income.
The decision of whether you qualify for credit is based on your _____.
Credit score.
When you need to borrow money, a bank, a finance company, or an individual may be the _____.
Creditor.
_____ is the ability to borrow money up to a certain limit set by the company issuing the credit (for an unspecified time limit).
Open-end credit.
_____ is a last resort legal process in which the assets of a debtor are distributed among creditors if they are unable to repay them.
Bankruptcy.
Some people take advantage of the _____, since there are no finance charges added to your account within this time.
Grace period.
An example of open-end credit is a(n) _____.
A credit card charge.
The total dollar amount you pay to use credit is the _____.
Finance charge.
A larger monthly payment is usually the trade-off for a _____.
Short-term loan.
A credit bureau is required to follow reasonable procedures to make sure that _____.
The information in a person’s file is correct.
How should a cardholder begin to correct a mistake on a credit card bill?
Notify the creditor in writing.
The Consumer Credit Counseling Service offers to _____.
Assist with advice and debt repayment plans.
In a Chapter 13 bankruptcy, the debtor usually gets to _____.
Keep most of their property.
Explain 3 of the warning signs that a person is experiencing financial problems.
- Difficulty paying bills on time.
- Increasing debt or reliance on credit.
- Lack of savings or emergency funding.
Pick 2 of the 5 C’s of Credit. Describe them by explaining what they mean to your overall credit score.
Capacity: Your capacity to handle debt.
Character: Demonstrating good character.
Tax benefits are an advantage of renting a house.
True.
A legal document that describes the conditions of a rental agreement is called a lease.
True.
A security deposit is money you pay the landlord for a security system.
False.
Equity is the value of a home minus the amount still owed on the loan.
True.
The amount of living space affects the price of the rental unit.
True.
A down payment on a house is usually 50% of the purchase price.
False
A long-term loan extended to someone who buys property.
Mortgage.
All people (seller, buyer, etc) meeting to complete a real estate transaction.
Closing.
A contract that outlines the rules and regulations of renting property.
Lease.
A valuation of property.
Appraisal.
A type of insurance that covers the loss of a tenant’s property as a result of damage or theft.
Renter’s insurance.
The way that people choose to spend their time and money.
Lifestyle.
An owner of property that rents their property to someone else.
Landlord.
Being able to move easily from place to place.
Mobility.
Have another person other than the original tenant take over a rental unit and payments for the remaining term of a lease.
Sublet.
Renting is often a wise choice for someone who wants _____.
Mobility.
A disadvantage of renting is _____.
High initial cost.
Your biggest monthly expense as a tenant is the _____.
Rent.
An advantage of owning your own residence is:
Freedom.
Based on the information you learned in class, which of the following is the best reason to sign a lease:
To protect the landlord & tenant.
Explain why it would be better from a 19 year old high school graduate who just moved to Chicago to rent a residence (versus buy).
- provides flexibility
- doesn’t require large upfront investment
- become familiar to area before buying
Advantage of renting an apartment.
Low maintenance/responsibility
Advantage of renting a house.
More space & mobility
Advantage of owning a house.
Pride of ownership
Advantage of owning a trailer.
Less expensive ownership option
