Study Set

Question 1

What is FDIC?

Answer 1

Federal Deposit Insurance Corporation/It insures all of the banks. Supervises financial institutions.

Question 2

What is Earnest Money?

Answer 2

Shows that the buyer is interested in purchasing the property. Like a down payment.

Question 3

What are some closing costs?

Answer 3

Closing a mortgage usually 3 to 6 percent your total loan balance. Processing fees.

Question 4

What is a down payment?

Answer 4

Represents a portion of the total price. It is done for a expensive things.

Question 5

What is a title search?

Answer 5

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

Question 6

What do points do?

Answer 6

It lowers interest rates. Interest prepaid at quarter percentage.

Question 7

A debit card.

Answer 7

Pay the money then and there.

Question 8

A credit card.

Answer 8

Pay the money at a later time.

Question 9

A money order.

Answer 9

Like a check but bought at stores.

Question 10

A cashiers check.

Answer 10

You pay the bank the money and they make the check to give to the payee.

Question 11

What is the truth in lending act?

Answer 11

The credit card company has to tell you what your credit card will be. The interest rate, and minimum payment plan.

Question 12

What is a secured loan?

Answer 12

The company who gave you the loan is able to take away what the loan is being used for. House, car. Has collateral

Question 13

What is a unsecured loan?

Answer 13

Student loans. there is no collateral.

Question 14

Home equity loans

Answer 14

Second mortgage.

Question 15

What is your FICO score?

Answer 15

Basically an estimated credit score that shows up.

Question 16

Credit reporting agencies?

Answer 16

Expierean, equifax, and trans union.

Question 17

Range for the credit score?

Answer 17

300 to 850

Question 18

What is escrow?

Answer 18

Where taxes and insurances are deposited.

Question 19

What is the debt ratio?

Answer 19

30 percent or less

Question 20

What is prime?

Answer 20

Set by federal reserve

Question 21

What is APR?

Answer 21

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

Question 22

What does forberence mean?

Answer 22

Temporaraly not making payments.

Question 23

What does default mean?

Answer 23

Just not making payments at all.

Question 24

Four things that are not wiped off credit report from bankruptcy?

Answer 24

Student loans
back taxes
child support
alimony

Question 25

What is PMI?

Answer 25

Private mortgage insurance. 20 percent

Question 26

What is PITI?

Answer 26

Components of mortgage payment. Principle
Interest
Taxes
Insurance

Question 27

What are disadvantages of credit cards?

Answer 27

It is debt. Inflation risk. Bad credit score can cause you no not be able to buy a car, rent or buy a house.

Question 28

What are advantages of credit cards?

Answer 28

Pay then and they have yo pay company later. Credit score enables you to buy bigger things.

Question 29

What does liquidity mean?

Answer 29

How fast you can get your money.

Question 30

Five credit worthiness.

Answer 30

Character
Capacity
Capital
Collateral
Conditions

Question 31

What is the Fair Credit Billing Act?

Answer 31

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

Question 32

What is the card act?

Answer 32

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.

Question 33

Chapter 13 bankruptcy?

Answer 33

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

Question 34

Chapter 7 bankruptcy?

Answer 34

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

Question 35

Conventional mortgages

Answer 35

fixed rate, fixed payment, 15, 20, or 30 years to pay off

Question 36

Government mortgages.

Answer 36

veterans administration
federal housing authority-strick lower down payment
has a lower down payment than conventional

Question 37

Buy down

Answer 37

home builders offer these so that buyers can afford payments early on

Question 38

character

Answer 38

deals with you

Question 39

capacity

Answer 39

how much money you have

Question 40

capital

Answer 40

money

Question 41

collateral

Answer 41

what can I take from you if you do not pay

Question 42

conditions

Answer 42

inflation, unemployment, recession, war