Finance Chapter 8 HW

Billy has chosen to purchase a new vehicle. The vehicle costs​ $15,000. His APR is​ 10% and he will be financing the vehicle for 36 months. How much will Billy pay each month for his new​ vehicle? ​$484.01
Congratulations! You have just agreed on the final price for your new car and now you have to finance the purchase. The negotiated price of the new car is​ $18,500 and you will receive​ $5,500 for your trademinus−in. What will your monthly payment be on a 48minus−month loan with a​ 7% APR? .​$311.30
A mortgage for less than​ 80% of the appraised value of the home will not require PMI insurance because they default less often. True
In evaluating your financial​ history, lenders generally focus on: Your credit reportYour FICO scoreYour income
PITI stands for the total of your monthly ​principal, interest,​ taxes, and insurance.
Jackie is considering obtaining a mortgage of​ $333,000. A lower APR is​ available, but she must pay 1.75 points to buy the rate down. How much must Jackie pay in​ dollars? ​$5,828
How much would the monthly payment be on a mortgage of​ $250,000 for 30 years at a rate of​ 6.0%? ​$1,498.87
With private mortgage​ insurance, many lenders will allow you to borrow more than​ 80% of the appraised value of the home. What is the purpose of this​ action? It protects the lender in the event the borrower is unable to make the mortgage payments.
When you decide to buy a​ home, what questions should be​ answered? Should I borrow up to this​ maximum?What is the maximum amount that a bank will lend​ me?How big of a down payment can I​ afford?
Name the items that are deposited in an escrow account. Property​ taxes, property insurance
As a rule of​ thumb, your PITI costs​ shouldn’t exceed​ ________ of your pretax monthly income. 28%
You have an annual gross income of​ $36,000. Using the​ 28/36 rule for maximum mortgage payment​ (PITI) estimation, what is your maximum PITI payment using your monthly gross income as a guide​ (28%)? $840
Bob and Mary Kay have gross household income of​ $7,000 per month. They both have great credit scores and the home they are interested in buying appraised higher than the selling price. They have combined monthly debt payments of​ $300 in student​ loans, $650 in car​ loans, and they pay their credit cards in full every month. The PITI on the new home will be​ $1,800 per month. Before they pay the​ $250 loan application​ fee, they are asking you for your opinion on whether they will get approved for a mortgage. What will you advise​ them? Based on the 36 percent rule they have too much other debt and will be denied the mortgage.
A fixedminus−rate mortgage is harder to budget for than an adjustable rate mortgage. True
The prepayment privilege allows the borrower to make early cash payments toward the principal balance on their loan. True

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