Lesson Objectives
- Identify various types of mortgage loans and the most cost-effective option for purchasing a home.
Assignment CU4.8
- Watch Video 4.4
- As you watch the video, record the missing words from pages 84-86 of the textbook as they pop up on the left side of the video screen by filling in this form. (pages 84-86) .
- Discussion Questions:
- List some wise decisions you should make when buying a house?
- Why are reverse mortgages (borrowing against the equity in your home) a bad idea?
Assignment CU4.9
- How do loans work? Watch the mortgage loan video below to determine the important steps that were advised to be taken when getting this particular loan. Also note what things you may want to avoid.
- Assume you have graduated college with the degree you chose in the Employment Unit. You have just recently taken a job in our area that pertains to your career path. Now you are looking to purchase a home. Search the internet for a home that is for sale in one of the surrounding counties listed below.
- Use this information to apply for a loan and to fill out the loan application. Use this application and a copy of it that will be handed to you to complete. Fill out as much as you can with accurate information, aside from social security numbers and the like. Complete all sections marked in grey. Aside from your personal information, use the information listed below:
- Section 1
- Mortgage Type: Conventional
- Agency Case Number: 122345
- Lender Case Number: 3233578
- 80% of the purchase price, assume you have 20% of your purchase price as a down payment. The rest is what you need to get a loan on.
- Interest Rate & # of months: search the internet for the current interest rate on a 180-month loan
- Amortization Type: Fixed
- Section 2
- Section 3
- Use your personal information as the borrower
- Use this information for the Co-Borrower:
- Jon / Jane Doe
- 324-54-3456
- 712-754-1234
- 01/01/93
- Yrs. School: 16
- Married
- 2
- Age 2, 4
- Section 4
- Employment Information: The job you applied for back in the Employment Unit, Lesson 4, “The Right Job” and “Cover Letter.” If your job didn’t have a salary listed, use the average for your career area from the “My Career” assignment in your Lesson 2 folder in the Employment Unit.
- Your spouse stays at home to raise your two kids, so you do not need to fill their employment part out.
- Section 5
- Monthly Income: The job you applied for back in the Employment Unit, Lesson 4, “The Right Job” and “Cover Letter.” If your job didn’t have a salary listed, use the average for your career area from the “My Career” assignment in your Lesson 2 folder in the Employment Unit.
- Borrower Income
- Enter your monthly salary information in Base Empl. Income
- Assume you also have $500 in monthly rental income as well
- Present Expenses
- Hazard Insurance is $200/month
- Real Estate Tax $750 for your rental property.
- Proposed Expenses
- Use the property tax information provided in the county listing for your house purchase.
- Section 6 (completed jointly as a couple)
- Cash or Market Value: Enter the down payment you calculated earlier (20% of purchase price).
- Assets
- You currently have a checking account with Number One Bank, 123 First St, Big Town, IA 51234, Acct. No. 348732 with $3,876.00.
- You currently have a savings account with Number One Bank, 123 First St, Big Town, IA 51234, Acct. No. 348733 with $12,476.00.
- Liabilities
- You currently have one loan on the new SUV you recently purchased. It was financed with Ford Motor Company, P.O. Box 6248, Dearborn, MI 48126, Acct. No. 763452, $325.47/month, Unpaid Balance = $24,000
- Subtotal Liquid Assets
- Total Assets, Total Liabilities, Net Worth
- Section 7
- List the purchase price for the house
- Closing Costs = $5,500
- Total your costs
- Enter loan amount
- Calculate your loan amount
- Calculate Cash from/to borrower
- Section 8
- Answer the questions listed
- Section 9
- sign the form
- Section 10
- use your personal information here
- Section 1
Assignment CU4.10
- After completing the assigned tasks in Lesson 4 above, share your Lesson 4 folder with your teacher. Before your share your Lesson 4 folder, be sure that you have each of the following files completed and in your folder:
- Student Loans
- S-O Grant/Scholarship Options
- FAFSA Application (handout)
- Cost of Ownership
- Car Shopping
- Car Loan Application (handout)
- Mortgage Application (handout)
Lesson 4 Quiz-CU
- Complete the Lesson 4 Quiz for the Credit Unit.