Bank Accounts/Loans
What best describes a checking account?
An account mainly used for everyday transactions
T/F: Paying bills late can hurt your credit score.
True
Renters insurance primarily protects...
Personal belongings inside a rented space
What is one advantage of renting instead of buying a home?
Not having a commitment to property- easy to move
Not responsible for fixing things- landlords job
What is the primary source of a savings account?
Storing money safely while earning interest
Paying credit card balances on time
Which type of insurance pays out to your family after you pass away?
Life
Name three types of loans someone might apply for
Car, home, personal
Why is a good credit score important?
It influences your ability to borrow and the interest rates you receive
T/F: If you do not have auto insurance, you can still drive a vehicle
False
What are the two types of mortgages someone can apply for?
15 and 30 year
What type of loan usually has the longest repayment term?
T/F: A lower credit score generally helps you get lower interest rates on loans.
False
This is the name of the amount of money you pay regularly to keep your insurance policy active
Premium
Why would someone choose a 30 year loan over a 15 year one?
Lower payments; might be beneficial for someone who has found their forever home but needs a lower payment
Student
Calculate the simple interest:
Remember: I= P X R X T
A student borrows $1,200 at 3% simple interest for 4 years. How much will the student owe in total after 4 years?
I= 144
Total owed: P + I
1,200 + 144= $1,344
The amount of money you pay out of your own pocket before the insurance company starts to pay.
Deductible
What is PMI? Why is it important to some lenders?
Private Mortgage Insurance; a type of insurance policy required on home loans when the borrower makes a down payment of less than 20% of the home's purchase price. It is a crucial safeguard for the lender, not the borrower, in the event of default and foreclosure.