borrowing/credit Flashcards
(42 cards)
Repaying a loan over a ___ can generally reduce the total amount of interest and fees a borrower has to pay on top of the principal.
shorter period of time
Borrowing less money means paying back ___ and ___ charged on that principal
less principal and less interest
Making ___ reduces the amount of money the person needs to borrow, which reduces the overall cost of a loan
large down payment
Lenders may adjust the price of a loan based on ___ they believe it to be
how risky
legal concept describing a financial agreement whereby an asset or money is held by a third party on behalf of two other parties that are in the process of completing a transaction
escrow
cost of reducing APR on your loan; 1 point = 1 percent of the loan
points
loan processing, paperwork, title transfer: 2-5% of the purchase price
closing cost
payment toward the offer to show you are serious (seller keeps it if you back out of deal) 1-3% of sale price
earnest money
Interest rate changes periodically in relation to the prime/current market rate
ARM (Adjustable Rate Mortgage)
Interest rate is fixed throughout the duration of the mortgage
fixed rate mortgage
for people with poor credit and low down payment; must pay mortgage insurance
Federal Housing Administration insured loan (FHA Loan)
Shop around for best interest rate, fees, other costs
banking institution
annual fees, interest rate, limits and penalties
cost of credit card
Stores, retailers, and merchants must pay a fee to ___
accept cards
1-4% fees for business to ___
accept credit card
0.5-1% fees for business to ___
accept debit card
amount of time between billing date and due date
grace period
credit score is also known as a ___, because lenders use it to determine how likely it is that a potential borrower will repay a loan
risk assessment score
credit score is based on ___ in your credit report
credit account information
credit score is ___ of the likelihood you’ll successfully repay a future loan
numerical forecast
Credit scores tend to ____.
drop more quickly than they rise
Must provide Finance Charge and Annual Percentage Rate
$50 liability
Truth in lending act
Cannot refuse credit on the basis of race, color, religion, gender, marital status, age or national origin
equal credit opportunity act
Check accuracy of credit reports; fix inaccurate data on report
fair credit reporting act
