Examine the basic guidelines to purchasing decisions statements below from chapter five$$s reading and

place a T for true or F for false beside each statement $(1-25$; $4$ points each$).$

$1.$ You should drive the car and complete your evaluation of the car before you talk price.

$2.$ A car$$s sticker price is synonymous with the suggested retail price.

$3.$ An automobile buyer will know the dealer$$s cost by searching Edmunds and Kelley Blue

Book.

$4.$ Car customers generally decide their price and then mark$-$up at least five percent for car

less than $$20,000$ and similarly seven to ten percent for higher price$/$luxury cars.

$5.$ Car buying services do each of the following:

a$.$ Have arrangement to sell cars at a predetermined price,

b$.$ provide you with bids from several local dealers, or

c$.$ place an order with the factory

$6.$ For most people, an automobile will be their second largest purchase.

$7.$ With regards to affordability, it is wise to consider buying a car that is two years old and

replacing in two years.

$8.$ Buying and selling every two years is not for all.

$9.$ Car lease terms are typically two to four years and at end of lease the leaser may have a

purchase option.

$10.$ It is wise to consider Hybrid because operating costs increase with age of normal cars.

$11.$ Generally Hybrid are vehicles with a combination of gas and electric fuel systems.

$12.$ Condominiums are the most popular form of single$-$family housing in America.

$13.$ A home$$s closing costs are rather insignificant and seldom amount to more than a few

hundred dollars.

$14.$ When financing a house, the amount of money you earn has significance ultimately with

the amount of money you can borrow.

$1$

$15.$ Mortgage insurance guarantees the lender that the loan will be paid off in the event of

the borrower$$s death unless the borrower is in an adjustable$-$rate mortgage

$16.$ Payments will change $($periodically$)$ in a fixed interest mortgage.

$17.$ In a fixed rate mortgage and the payment will not change periodically nor will the

prevailing $($market$)$ interest rates.

$18.$ With a fixed rate mortgage, the payment will not change nor will its rate of interest.

$19.$ A significant factor in how much you can borrow in a mortgage is how much you

presently earn.

$20.$ A significant factor in how much you can borrow in a home mortgage loan is your credit

score and $/$ or payment history.

$21.$ The following each qualify as a type of housing:

a$.$ Single Family

b$.$ Condominiums

c$.$ Cooperative apartments

d$.$ Rental Units

$22.$ Affordability, with regards to home ownership, is the ratio of the average house price to

the average annual rent, which provides insight into the relative attractiveness of buying

a house versus renting in a given area of potential interest.

$23.$ If a house$$s down payment is less than $20\%$ the potential owner may be required to

obtain private mortgage insurance $($PMI$)$ which protects the lender if borrower defaults

on the loan.

$24.$ Similarly, PMI ends when mortgage is paid down to $80$ percent of the home$$s original

value.

$25.$ If mortgage rates drop by about $2$ percent, you, the home$$s owner, should compare the

rate savings with the refinancing costs, and if the savings are greater than the costs, the

homeowner should refinance.