Chapter 8

Question 1

a person with whom you share living space, living expenses, and other responsibilities

Answer 1

roommate

Question 2

two or more people who each agree to bear a portion of an obligation

Answer 2

shared responsibility

Question 3

your daily routine, or the way you choose to live your life

Answer 3

living habits

Question 4

a refundable amount paid to cover damages to property caused by a tenant

Answer 4

security deposit

Question 5

the act of making a plan and carrying it out to ensure that an event takes place

Answer 5

logistics

Question 6

a legally binding agreement that specifies the rights and duties of each party to the agreement

Answer 6

contract

Question 7

something of value exchanged for something else of value

Answer 7

consideration

Question 8

a written agreement that allows a tenant to use property for a set period of time at a set rent payment

Answer 8

lease

Question 9

a written contract that allows you to leave any time as long as you give the required notice

Answer 9

rental agreement

Question 10

the legal process of removing a tenant from rental property

Answer 10

eviction

Question 11

an off-site manager hired to take care of rental property

Answer 11

property manager

Question 12

a cash deposit toward the purchase price that is paid up front

Answer 12

down payment

Question 13

something of value applied toward the down payment of a new purchase

Answer 13

trade-in

Question 14

a loan for which a maximum amount is established and approved in advance

Answer 14

preapproved loan

Question 15

paying off an existing loan with a new loan that usually has better terms

Answer 15

refinancing

Question 16

a loan used to purchase real estate

Answer 16

mortgage

Question 17

a contract in which a portion of the renter’s monthly payment is applied toward the purchase price of the rented item

Answer 17

rent-to-own agreement

Question 18

a strategy for paying off debt in a way that reduces the total interest paid

Answer 18

debt repayment plan

Question 19

a large lump-sum payment that must be paid at a set time

Answer 19

balloon payment

Question 20

a fee charged if you repay a loan before the agreed-upon time

Answer 20

prepayment penalty

Question 21

establishing and following an individual plan for using credit wisely

Answer 21

credit management

Question 22

a plan to limit the use of credit to no more than 20 percent of your yearly take-home pay, with payments of no more than 10 percent of monthly take-home pay

Answer 22

20/10 Rule

Question 23

the remaining credit available to you on current accounts

Answer 23

unused credit

Question 24

unfair, deceptive, and fraudulent loan practices

Answer 24

predatory lending

Question 25

a person who offers illegal loans at very high interest rates and often uses intimidation to enforce repayment

Answer 25

loan shark

Question 26

credit type of credit that can be obtained quickly and easily but that often comes with high or hidden costs

Answer 26

easy access

Question 27

a short-term loan with a high interest rate that uses the title on your vehicle as collateral

Answer 27

title loan

Question 28

the unethical practice of extending a loan to a distressed homeowner who cannot afford the loan payments, resulting in the lender taking possession of the home

Answer 28

equity stripping

Question 29

a cash advance from your next paycheck

Answer 29

payday loan

Question 30

a type of loan that includes a large fee up front

Answer 30

advance-fee loan