Final Unit 5 Flashcards
your inability to pay your debt
bankruptcy
your ability to borrow someone else’s money
Credit
pay cash with an ATM
debit card
card that borrows funds from the bank
credit card
any money you owe from an account that allows you to borrow against a credit line
revolving debt
a consumer good that lasts many years
consumer goods
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
car lease
money that is owed
debt
when they stop paying a debt
default
taxes you pay for your property
property tax
a written guarantee, issued to the purchaser by the manufacturer to replace or repair the product within a given amount of time
warranty
money left over after paying all the tax
disposable income
if your car ever breaks down you go to
maintenance
20 percent of the value of the mortgage
down payment
bank fees, title fees, property taxes, homeowner’s insurance
closing costs
rate are lower but they expire after 12 months to 5 years, rates go up, has higher payments
adjustable-rate mortgage
common loan option, comes with loans that never change
fixed rate mortgage
homeowner’s policies are requires by most banks. funds are added to your monthly payment
insurance
When you use a credit card, where does the money come from?
it comes from the bank
What concept of debt do credit cards operate on?
revolving debt
What are the 4 C’s of credit?
Credit History, Character, Capacity to Pay, Capital
Why would a collection agency call you?
for you to pay the debt
How long do credit history actions follow you?
month to month
How long does bankruptcy stay on your credit report?
10 years
What are the major credit agencies?
Experian, TransUnion, Equifax
What is the most common length for a mortgage?
30 years
What is the most common length for a car loan?
72 months
What is an example of a purchase that would increase in value over time?
real estate
Does buying a home increase the likelihood of building wealth?
yes
What happens if someone does not pay their mortgage?
your property will be taken away
