| Term | Definition |
|---|
| 1/3 | What part of annual income the average American family spends on housing |
| 2/3 | What part of housing units are owned by people who live in them |
| Single-family house | "the American dream"-- but also the most expensive to buy and maintain |
| Town house | House with two or more floors that shares yards and wall with neighbor-- less expensive because of shared cost of these |
| Condominium | a privately owned town house unit in an apartment or town house complex, with jointly-maintained common areas like hallways, lawns, pools, laundries |
| Cooperative | A building owned "in common" by its residents, who share costs together and make decisions about the property together |
| Mobile homes | a popular form of low-cost housing-- cheaper to buy and maintain, but subject to "lot rent," storm damage, and DEPRECIATION |
| Depreciation | Decline in value over time |
| Real estate taxes | Property taxes paid on land and buildings |
| Rule # 1-- How much house can you afford? | the "purchase price" should be no more than 2 1/2 times your ANNUAL income |
| Rule # 2-- How much house can you afford? | The mortgage payment should be no more than 1/3 of you MONTHLY TAKE-HOME Pay |
| 80% of total | the amount of purchase price lenders are commonly willing to lend |
| Closing costs | all the fees that must be paid on the day of transfer of ownership (usually by the BUYER)-- title search, legal costs, points, loan application, credit report, house inspection, sales taxes, realtor fees |
| Points | a fee paid to the lender at closing that is a percentage of the loaned amount-- each is "one percent" |
| Liability | the standard "legally required" auto insurance coverage-- it is frequently referred to in terms such as "50/100/50" or "100/300/50"-- it covers only injury to other people (NOT yourself) and damage to other people's vehicles or property |
| Collision | an Addition to basic liability (you have to pay more to get it)-- it covers damage to YOUR vehicle in cases of accident (even if it's your own fault) |
| Comprehensive | also an Addition to basic liability, this covers damage to your vehicle in "non-driving" cases (vandalism, hail, fire, falling objects, etc.) |
| Full coverage | a common term for a policy that includes liability, collision, and comprehensive |
| Premium | your regular payment to the insurance company for coverage of whatever kind |
| Deductible | a "dollar amount" you agree to pay in case of damage to your vehicle-- the more you pay (the higher your deductible) the lower your premium will be |
| "No fault" insurance | the legal standard policy in some states-- basically, "no fault" means that each person's insurance company will pay for damages to their own client's vehicles |
| Straight Life insurance | aka "Whole Life"-- a life insurance policy with accumulating cash value that covers aslong as premiums are paid, and pays a death benefit upon decease-- it is more expensive because of these things |
| Term Life insurance | a life insurance policy that pays only if the owner dies during the fixed period of coverage |
| Excise taxes | aka "sin taxes"-- taxes paid on all the things the government wants people to use less of-- tobacco, alcohol, gasoline, drugs |
Combine with other sets
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