Down payments, APR, mortgage terms, escrow, leasing vs buying, and negotiation.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is a down payment?
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Money paid upfront when buying a car or home, reducing the amount you need to borrow.- What percentage should a down payment be for a car purchase?
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Between 10 and 20 percent is typical, though some buyers put down as little as 3 to 5 percent.- What is PMI?
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Private Mortgage Insurance, required by lenders when a home down payment is below 20 percent, protecting the lender if you default.- What does it mean to lock in a mortgage rate?
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Guaranteeing your interest rate with the lender for a set period to protect against rate increases before closing.- What is APR?
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Annual Percentage Rate, the yearly cost of a loan expressed as a percentage, including both interest and fees.- Why does APR matter when buying a car?
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A lower APR means you pay less in total interest over the life of the loan, saving money.- What is the difference between interest and principal?
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Principal is the original amount borrowed; interest is the charge the lender imposes for lending that money.- What is a loan term?
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The length of time you have to repay a loan, commonly 36 to 72 months for a car or 15 to 30 years for a home.- What does it mean to lease a car?
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Renting a car for a fixed period, typically 2 to 4 years, then returning it to the dealership at the end of the lease.- What is one advantage of leasing a car?
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You avoid major repair costs because the car is covered by warranty, and the dealer maintains the vehicle.- What is one disadvantage of leasing a car?
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You make monthly payments but never own the car, and you face penalties for excess mileage or wear and tear.- What is one advantage of buying a car instead of leasing?
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You own the car outright after paying off the loan and can use it as long as you want without mileage or wear penalties.- What is depreciation?
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The decrease in a car's market value over time due to age, mileage, and wear.- What is gap insurance?
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Insurance that covers the difference between what you owe on a car loan and the car's actual cash value if it is totaled.- Why should you get pre-approved for a car loan?
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Pre-approval verifies your credit, strengthens your negotiating position with the dealer, and confirms your budget.
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