Study Set Flashcards
What is FDIC?
Federal Deposit Insurance Corporation/It insures all of the banks. Supervises financial institutions.
What is Earnest Money?
Shows that the buyer is interested in purchasing the property. Like a down payment.
What are some closing costs?
Closing a mortgage usually 3 to 6 percent your total loan balance. Processing fees.
What is a down payment?
Represents a portion of the total price. It is done for a expensive things.
What is a title search?
Must be the owner of the house.
Figures out previous owner
if they are allowed to sell it
no tax leans
is there a claim against them
What do points do?
It lowers interest rates. Interest prepaid at quarter percentage.
A debit card.
Pay the money then and there.
A credit card.
Pay the money at a later time.
A money order.
Like a check but bought at stores.
A cashiers check.
You pay the bank the money and they make the check to give to the payee.
What is the truth in lending act?
The credit card company has to tell you what your credit card will be. The interest rate, and minimum payment plan.
What is a secured loan?
The company who gave you the loan is able to take away what the loan is being used for. House, car. Has collateral
What is a unsecured loan?
Student loans. there is no collateral.
Home equity loans
Second mortgage.
What is your FICO score?
Basically an estimated credit score that shows up.
Credit reporting agencies?
Expierean, equifax, and trans union.
Range for the credit score?
300 to 850
What is escrow?
Where taxes and insurances are deposited.
What is the debt ratio?
30 percent or less
What is prime?
Set by federal reserve
What is APR?
Based off of prime rate. the true simple interest rate paid over the life of the loan. Is the percentage cost of all finance charges over the life of the leon, on a annual basis
What does forberence mean?
Temporaraly not making payments.
What does default mean?
Just not making payments at all.
Four things that are not wiped off credit report from bankruptcy?
Student loans
back taxes
child support
alimony
What is PMI?
Private mortgage insurance. 20 percent
What is PITI?
Components of mortgage payment. Principle
Interest
Taxes
Insurance
What are disadvantages of credit cards?
It is debt. Inflation risk. Bad credit score can cause you no not be able to buy a car, rent or buy a house.
What are advantages of credit cards?
Pay then and they have yo pay company later. Credit score enables you to buy bigger things.
What does liquidity mean?
How fast you can get your money.
Five credit worthiness.
Character
Capacity
Capital
Collateral
Conditions
What is the Fair Credit Billing Act?
procedures for correcting billing errors
Withhold payment for item in question
Notify the card issuer within 60 days of the statement date. Use “billing inquiry” or “billing error” address on credit card bill.
Notification should be within 30 days
Card issuer investigates within 90 days—account is credited or not with explanation
What is the card act?
Restrictions on over-the-limit transactions.
Caps on high-fee cards.
Protections for underage consumers.
Standard payment dates and times.
Payments directed to highest interest balances first.
Your credit card company cannot charge you a fee of more than $25 in most cases.
No inactivity fees.
Chapter 13 bankruptcy?
provides relief from harassment by bill collectors; retains possession of assets , provides controlled repayment with court supervision. The wage earner plan. Regular income, secured debts under $1,184.200 and unsecured debts under $394,725
Chapter 7 bankruptcy?
can eliminate debts and begin again, must meet a means test, most debts wiped out-not child support, almininy, student loans or taxes, trustee collects sells all nonexempt property , and must complete credit counseling course
Conventional mortgages
fixed rate, fixed payment, 15, 20, or 30 years to pay off
Government mortgages.
veterans administration
federal housing authority-strick lower down payment
has a lower down payment than conventional
Buy down
home builders offer these so that buyers can afford payments early on
character
deals with you
capacity
how much money you have
capital
money
collateral
what can I take from you if you do not pay
conditions
inflation, unemployment, recession, war
