What are the two largest expenditures for most consumers? 

Housing and transportation

Housing accounts for 33% and transportation for 18% and expected to increase with fuel price increases. 

• When rent is due and if there is a grace period
• amount of the security deposit (protect the landlord if the tenant vacates without making required payments or damages the unit)
• method to terminate lease
• how maintenance and repairs are handled
• special charges or fees

• Landlord must return the SD within 30 days of the lease terminating. 
• tenant is entitled to inspect premises within 5 days after termination of occupancy. 
• tenant must sign move out inspection list or specify in writing any items in dispute

YES! 

cashing the check bounds themselves

In Ga, the landlord have to tell a prospectiv tenant that a murder occured or that it used to be a drug dealer house? 

• Right to Privacy ( landlord may enter in case of emergency or with advance notice for inspections and repairs)
• Right to Safety ( that the unit is fit to live in)

What is the national homeownership rate?

what is one of the major reasons for growth of homeownership?

66.5%

-New mortgage products and credit guidelines opened the market to populations that previously would not have qualified to buy a house. 

2 and a half times your annual household gross income

28/36 qualifying rule for conventional mortgages

House payment should be no more then ___% of your monthly income

House and debt payments should be no more then ___% of your monthly income. 

20%

36%

An "unaffordable burden"  is...

A "critical burden" is ....

• an unaffordable burden is when a househould spends 30% of their income on housing
• A critical burden is when a family spends at least 50% of their income on housing. 

3-20%

you must also be credit qualified, and either have a fixed rate mortgage or an adjustable rate mortgage

a mortgage loan where the interest rate on the loan remains the same through the term of the loan, as opposed to where the interest rate may adjust or "float".

ex: 15 yr or 30 yr loan

• for people 62 yrs or older
• allows owner to covert a portion of the equity into cash
• homeowner retains  title to thier house
• loan does not have to be repaid during the homeowner's lifetime
• loan advances are not taxable and do not affect the homeowner's SS or Medicare benefits

Subprime Mortgage Loans

how much has the subprime market grown between 2001 -2005 ?

loans given to households with poor credit

-almost always have a higher than average interest rate

grew from $210 billion in 2001 to $625 billion in 2005

What percentage of mortgages originated last year were subprime? 

What was the percentage in 2000?

13.5% in 2010

2.3% in 2000

Equity Line of Credit

Equity= ?

Equity = Current value of a home- outstanding mortgage balance

**a benefit of an equity loan is that interest is tax deductible. You can borrow 80% of the equity in your home

invoice price

Base Price

Dealer Sticker Price

Price manufacturer charges the dealer

cost of car including standard equipment and factory

Dealer installed options and dealer markup

nearly 2/3

**The cost of insurance is much higher for new cars. 

Advantages of Used Cars:

Depreciation costs can be up to what % on new cars within the first 2 years?

Disadvantages of USed Cars:

What is the most important disadvantage of used cars?

Where to buy a used car:

1) dealerships : account for 50% of the used cars sold annually

2) Superstores: recent development. have a large stock of cars and buyers have access to a computer assisted selection. car prices are fixed and not negotiable. newer models available

3) independent lots: all ranges of cars. offer financing and strong pressure to finance through them. their finance rates are usually higher than an banks or credit unions. 

4) private sales: have to be cautious. sale may be risky becuase of stolen cars with phony titles. can be concealed damage or major repair problems. 

1) make an offer but it should be 15-20% below the max amount you are willing to pay. 

2) if you get asked about a trade-in or dealer financing just say UNDECIDED because your goal at this point is to get an agreement on the car price. 

3) your last offer should be CLOST to the MAX price you are willing to pay. try to justify how you came up with this reasonable price by showing how you arrived at it. 

4) if the dealership rejects your last offer, be prepared to walk away. The sales person may phone you the next day or try to work with you. 

The cars value at the end of the lease. 

also known as the guaranteed future value or lease-end value and is expressed as %age of the MSRP. 

covers the difference between the replacement value of the car and what is still owed on the lease. It is expensive to purchase this seperately so ask if it is included without charge in the original lease argreement.

*helps for if a car that is leased is totaled or gets stolen.