Final Unit 5

Question 1

your inability to pay your debt

Answer 1

bankruptcy

Question 2

your ability to borrow someone else’s money

Answer 2

Credit

Question 3

pay cash with an ATM

Answer 3

debit card

Question 4

card that borrows funds from the bank

Answer 4

credit card

Question 5

any money you owe from an account that allows you to borrow against a credit line

Answer 5

revolving debt

Question 6

a consumer good that lasts many years

Answer 6

consumer goods

Question 7

allows you to drive a vehicle from a dealership for an agreed upon amount of time and miles, and pay for its usage rather than for the full purchase price of the vehicle

Answer 7

car lease

Question 8

money that is owed

Answer 8

debt

Question 9

when they stop paying a debt

Answer 9

default

Question 10

taxes you pay for your property

Answer 10

property tax

Question 11

a written guarantee, issued to the purchaser by the manufacturer to replace or repair the product within a given amount of time

Answer 11

warranty

Question 12

money left over after paying all the tax

Answer 12

disposable income

Question 13

if your car ever breaks down you go to

Answer 13

maintenance

Question 14

20 percent of the value of the mortgage

Answer 14

down payment

Question 15

bank fees, title fees, property taxes, homeowner’s insurance

Answer 15

closing costs

Question 16

rate are lower but they expire after 12 months to 5 years, rates go up, has higher payments

Answer 16

adjustable-rate mortgage

Question 17

common loan option, comes with loans that never change

Answer 17

fixed rate mortgage

Question 18

homeowner’s policies are requires by most banks. funds are added to your monthly payment

Answer 18

insurance

Question 19

When you use a credit card, where does the money come from?

Answer 19

it comes from the bank

Question 20

What concept of debt do credit cards operate on?

Answer 20

revolving debt

Question 21

What are the 4 C’s of credit?

Answer 21

Credit History, Character, Capacity to Pay, Capital

Question 22

Why would a collection agency call you?

Answer 22

for you to pay the debt

Question 23

How long do credit history actions follow you?

Answer 23

month to month

Question 24

How long does bankruptcy stay on your credit report?

Answer 24

10 years

Question 25

What are the major credit agencies?

Answer 25

Experian, TransUnion, Equifax

Question 26

What is the most common length for a mortgage?

Answer 26

30 years

Question 27

What is the most common length for a car loan?

Answer 27

72 months

Question 28

What is an example of a purchase that would increase in value over time?

Answer 28

real estate

Question 29

Does buying a home increase the likelihood of building wealth?

Answer 29

yes

Question 30

What happens if someone does not pay their mortgage?

Answer 30

your property will be taken away