Brilliant Borrower Badge Pre-AssessmentBy Holly Henry / March 18, 2024 You have one attempt to complete this pre-assessment. This assessment will measure your existing knowledge of the topics presented in this module. Click Start Quiz to begin. After you select a response, click Next to progress through each question. When you complete the assessment, click the blue Submit button at the bottom right of the page. You'll receive a pre-assessment score and a copy of your results to review. Click Mark Complete to finish this lesson. 1. A poor credit history results in all EXCEPT: Decreased fees and charges High interest rates on loans Limited number of willing lenders Derogatory marks on your credit report None 2. What are some ways to maintain and improve credit? Keep a record of your credit card purchases to avoid exceeding your credit limit. Only apply for credit when you really need it. Pay more than the minimum due. All of the above. None 3. Which of the following is a disadvantage of bad credit? Lower interest rates Availability of credit scores Limited employment opportunities Lower insurance premiums None 4. Which of the following is NOT one of the three C’s of credit? Capacity Competency Collateral Character None 5. Which TWO of the following factors determine the total cost of a loan? A. Interest rate B. Length of loan engagementC. Length of employment historyD. Location of the loan company A & B B & C C & A B & D None 6. Bad debt involves all EXCEPT: High interest rate Unusually long term for the loan Low return on the investment A purchase that increases in value or generates income None 7. Which of the following hypothetical situations would justify borrowing money now to repay in the future? It never makes sense to borrow money. An auto loan to secure reliable transportation to work. It always makes sense to buy now and pay later. When there is a really good sale at your favorite store. None 8. ______ typically carries a higher interest rate than some other forms of debt. Credit card debt Home loan debt Student loan debt Business loan debt None 9. Which of the following would be considered "good debt"? Credit card debt Home loan Pay Day loan Cash advance loan None 10. To reduce the total finance costs paid over the life of an auto or home loan, you should choose the lowest monthly payment. longest repayment term. shortest repayment term. None of the above. None 11. Suppose you owe \$ 3,000 on your credit card. You pay a minimum payment of \$ 30 each month. At an Annual Percentage Rate (APR) of 12% or 1% per month, how many years would it take to eliminate your credit card debt if you made no additional new charges? Between 5 and 10 years Less than 5 years Never, you will continue to be in debt Between 10 and 15 years None 12. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, would you be able to buy more than, exactly the same as, or less than today with the money in this account? More than today. Exactly the same as today. Less than today. None 13. Which costly mortgage loan appeals to consumers with the lowest down payment but carries the highest interest rate? Government mortgage loan Sub-prime mortgage loan Conventional mortgage loan None 14. When should you be ready to buy a house? When your financial goals, values, and situation align and make it realistic for you When your best friend does When you have your first job When you are tired of your current roommate None 15. Lenders will compare your monthly debts to your monthly income for what purpose? After closing to set the interest rate for your mortgage Every year after you obtain your mortgage to determine your loan payment To determine whether to offer you a fixed rate instead of a variable rate loan before you buy a home To determine if you can afford a particular mortgage loan before you buy a home None 16. The information on a cost estimate is different from the closing disclosure document because of which TWO reasons: A. The two documents are unrelated.B. The estimate is based on limited information before document verification.C. The estimate is a tool to inform you, while the closing documents are legally binding terms of a loan agreement.D. Mortgage brokers are trying to trick you. A & D B & C A & C B & D None 17. When renting an apartment or home: Your rent may increase. Homeowners insurance is required. You are responsible for property taxes. You are the owner of the property. None 18. When buying an apartment or home, what can happen to the value of the property over time? The value of the property may increase. The value of the property may decrease. The value of the property may stay the same. All of the above. None 19. When compared to a 30-year mortgage, a 15-year mortgage results in: Higher monthly payments and more interest paid over the life of the loan. Lower monthly payments and more interest paid over the life of the loan. Higher monthly payments and less interest paid over the life of the loan. Lower monthly payments and less interest paid of the life of the loan. None 20. Do you think the following statement is true or false? “Housing prices in the United States can never go down.” True False None When you're ready to submit your Assessment, please click the blue Submit button. Once you have the results of your Assessment, please make sure to click the MARK COMPLETE button below or you will NOT be able to continue into the badge content and will have to retake this Assessment. Time's up
