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Finance Flashcards

Personal Finance VB – Insurance

The location of a home is important because… A good location will make a home easier to sell later, homes in good locations will usually appreciate in value, & not all locations have good school systems or the same amenities
Which statement is true of an adjustable rate mortgage? The interest rate will stay fixed for a period of time, then adjust either up or down based on an index
Your total debt from all loans should not exceed what percentage of your gross monthly salary? 36%
When figuring out the total amount of debt you are responsible for, you should include… Car loans, home loans, school loans, and any credit card debt
A real estate agent is able to… Arrange for you to tour homes that you are interested in purchasing & assist you at closing
A simple formula for finding your equity in your home is… Market value of your home minus outstanding loan balance
True/False: You will always pay less interest with a 15-year mortgage than with a 30-year mortgage, provided that the interest rate is the same for both loans True
True/False: The cost of repainting the kitchen before moving in is covered in your closing costs False
A “point” on a loan equals… 1% of the loan amount
When planning to buy a home, your monthly housing related costs should not exceed what percentage of your monthly gross income? 28%
If your MP3 player is stolen from your apartment, what type of insurance would it be covered under? Renters insurance
A deductible is… The amount of the loss you pay
True/False: Deductible is a type of insurance False
True/False: You always want the lowest possible deductible because it means you will pay less out of pocket in case of a loss False
Most insurance companies sell you insurance because… They generally take in more in premiums than they pay out
True/False: Life insurance is not used for investing in the stock market True
One of the two types of life insurance is… Whole Life Insurance
True/False: A “point-to-point service plan” is a type of health insurance False
If a person in your house was bitten by your dog, which type of insurance would you be covered under? Homeowners Insurance
If you crashed your car into a house, which kind of insurance would you use? Auto Insurance

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