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What's Your Financial IQ?

By Jasmine Jernberg
Maryland Newsline
Tuesday, Dec. 9, 2008

1. What should you do if you are worried about being able to pay your mortgage?

Pay whatever amount you can each month.
Wait a few months to see if anything changes and then contact your lender.
Discuss your options with your lender as soon as you think there might be a problem.

2. If you lose your job, what shouldn’t you do?

Cut out discretionary expenses, like cable and telephone.
Hire the best credit counselor you can afford to advise on handling your debt.
Pay for food and utilities before your mortgage and credit card bills.

3. What should you do if you are facing foreclosure on your mortgage?

See if your lender will allow you to find a qualified buyer to assume your mortgage.
Borrow against the equity in your home to help make the payments.
Sign your deed over to a buyer who can assume the mortgage or find a qualified buyer.

4. You’re worried about current market conditions and you don’t want your mortgage payments to be affected if interest rates rise. Which type of mortgage might you prefer?

Adjustible-rate mortgage (ARM)
Fixed-rate mortgage
Balloon mortgage

5. If you think you have been a victim of unfair lending practices, make a complaint with the Federal Reserve and it will:

Determine if your pending lawsuit is valid.
Resolve complaints about bank policy and customer service.
Obtain bank files to determine if the bank violated federal law.

6. If you are facing foreclosure, you may be eligible to extra relief options from your lender if:

You have been affected by a national tragedy or disaster.
You have been called for active military duty.
You have recently retired.
All of the above.

7. Which is not a good way to improve your credit report?

Obtain a copy and dispute inaccurate information in writing to the credit agency.
Talk to creditors about lowering monthly payments so you can pay on time.
Contact a debt relief company to consolidate your bills into one low monthly payment.

8. Accumulating wealth is key to financial stability. You can accumulate wealth by buying:

A house.
A boat.
A car.

9. The program "Hope for Homeowners" was created to help buyers avoid foreclosure and allow them to refinance to a more manageable loan. You could be eligible for this assistance if:

Your mortgage originated after Jan. 1, 2008.
Your mortgage payment exceeds 31 percent of your gross monthly income.
You own multiple residential properties.


Copyright © 2008 University of Maryland Philip Merrill College of Journalism

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