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House Hunting Finding your own place is exciting, but it is also a big responsibility.

House Hunting Finding your own place is exciting, but it is also a big responsibility. What are some costs associated with renting or buying a home?. Lesson Objective Compute the mortgage loan amount. Content Vocabulary. mortgage loans. mortgage loans

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House Hunting Finding your own place is exciting, but it is also a big responsibility.

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  1. House Hunting Finding your own place is exciting, but it is also a big responsibility. What are some costs associated with renting or buying a home?

  2. Lesson Objective Compute the mortgage loan amount. Content Vocabulary • mortgage loans mortgage loans A long-term loan extended to someone to buy a property.

  3. Lesson Objective Use a table or formula to determine the monthly payment, the total amount paid, and the total interest charged.

  4. Lesson Objective Calculate the total closing costs. Content Vocabulary • closing costs closing costs Costs associated with the transfer of property from the seller to the buyer, which may include fees for the property survey, loan application, document preparation, and points.

  5. Lesson Objective Compute the allocation of the monthly payment to the principal and interest and the new principal.

  6. Lesson Objective Calculate the assessed value and real estate taxes for a home. Content Vocabulary • real estate taxes real estate taxes Taxes collected by the city or county from homeowners to pay for roads, parks, schools, government offices, and other services. assessed value The dollar value a tax assessor assigns to a property for taxation purposes. tax rate The percent of income, sales, or property value collected in taxes. The tax rate on property is sometimes expressed in mills per dollar of the property’s assessed value. market value The price at which a property can be bought or sold. rate of assessment The percent of a property’s market value that is taxed. • assessed value • tax rate • market value • rate of assessment

  7. Lesson Objective Determine the amount of coverage for homeowner’s insurance. Content Vocabulary • homeowners insurance homeowners insurance Provides financial protection for homeowners against various losses. property damage coverage Provides financial protection against damage to one’s home and personal property from fire, windstorm, rain, lightening, and other unpredictable events. personal liability coverage Provides financial protection for homeowners if someone alleges that their negligence cause him or her bodily injury or property damage while on the insured’s property. • property damage coverage • personal liability coverage

  8. Lesson Objective Determine the amount of coverage for homeowner’s insurance. Content Vocabulary • medical coverage medical coverage Pays for medical expenses for nonfamily members accidentally injured on your property. loss-of-use coverage Pays for the expenses for living away from home while your damaged home is being repaired. replacement value The amount required to construct a home if it is destroyed. • loss-of-use coverage • replacement value

  9. Lesson Objective Calculate the annual homeowners insurance premium Content Vocabulary • premium premium The amount paid to an insurance company for insurance coverage. fire protection class A number assigned by an insurance company to a building that reflects how fire resistant it is and how close it is to a water source. • fire protection class

  10. Figure 10.6

  11. Lesson Objective Compute the total housing cost and compare it with suggested guidelines. Content Vocabulary • utility costs utility costs Public services, such as telephone, electricity, water, and gas.

  12. Other Housing Costs Your total monthly housing costs should be less than 35% of your monthly gross pay.

  13. Lesson Objective Calculate the average monthly cost of renting a home, and compare the total costs of renting to the total cost of owning a home. Content Vocabulary security deposit Made when signing a lease, it is a one-time payment that may be used to pay for cleaning the apartment at termination of the rental agreement, to change the locks, or to repair damage to the rental unit. • security deposit

  14. Summary Closing Costs Mortgage Loans Real Estate Taxes Various Costs Other Housing Costs Allocation of the Monthly Payment Homeowners Insurance Homeowner Costs There are many costs for homeowners.

  15. Jeremy Wolfinger and his wife are purchasing a house for $219,500. They have $34,500 for a down payment. What is the amount of their mortgage loan? • $154,000 • $185,000 • $213,200 • $219,500

  16. Tyler Smith is purchasing a home for $420,000. The bank wants Tyler to make a down payment of 35%. The mortgage loan is for 6.5% annual interest for 30 years. What is the total amount of interest charged? (The monthly payment for a $1,000 loan is $6.32) • $348,129.60 • $535,584 • $621,129.60 • $955,584

  17. City Bank has approved a mortgage loan for Dean and Angel Warner. The home’s selling price was $198,500. They need a 25% down payment. Their closing costs are $1,205. The processing fee is 1.10% of the mortgage. What is the mortgage total if they finance the closing costs? • $143,902.11 • $146,750.89 • $150,312.95 • $151,717.63

  18. The Andersen’s were charged the following closing fees: $321, $2,000, $875.60, $511.23, $50, $125, and $1,621.90. What was the total of these fees? • $4,310.65 • $4,892.44 • $5,504.73 • $5,612.09

  19. Arlene Ledbetter obtained a 30-year, $300,000 mortgage from the bank. The interest rate was 5.5%. Her monthly payment is $1,611.00. For the first payment, what is the amount of interest she paid? • $328.37 • $1,375.00 • $1,540.90 • $1,703.37

  20. ALGEBRA Nancy Tyrell-Cullen pays $2,198.50 in annual property taxes. The rate of assessment for her tax district is 46% and her tax rate is 43.05 mills. What is the property’s market value? • $111,018.53 • $123,498.54 • $175,409.88 • $189,661.91

  21. Otis and Stella Stevens estimate the replacement value of their home at $209,500. They have insured the home for 85% of its replacement value. What is the amount of coverage on their home? • $128,750 • $148,321 • $178,075 • $198,450

  22. Yolanda Hernandez has a monthly gross pay of $3,209.75. Her housing expenses for March were 34.5% of her monthly gross pay. What were her housing expenses for March? • $1,009.61 • $1,107.36 • $1,191.23 • $1,231.41

  23. Patrick Lawton plans to rent an apartment for $775 per month. The security deposit is one month’s rent. He estimates that annual expenses will be $5,402. What is his average monthly cost? • $1,009.11 • $1,114.39 • $1,218.44 • $1,289.75

  24. Melissa Hefley’s mortgage payment is $1,230 per month. Her annual expenses are $7,540. She receives a $985 tax savings each year as a homeowner. What is her average monthly cost? • $1,542.09 • $1,776.25 • $1,940.42 • $2,310.04

  25. End of Chapter 10 Housing Costs

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