HOUSING: A PLACE TO CALL HOME CHAPTER 13

YOUR HOUSING OPTIONS 13.1

TYPES OF HOUSING YOUR PARENTS’ HOME DORMITORIES-MAY BE REQUIRED FOR FRESHMEN. APARTMENTS-RENT HOUSES-RENT OR OWN CONDOS-SIMILAR TO AN APARTMENT THAT YOU OWN, COMMON AREAS ARE SHARED. HOA FEES MOBILE HOMES-INEXPENSIVE, RENT LOT

SHARED HOUSING COSTS AGREE ON RULES OF BEHAVIOR DIVIDE RESPONSIBILITIES MAKE A WRITTEN AGREEMENT ROOMMATES ARE ALL RESPONSIBLE FOR MEETING LEASE TERMS. LEASE-A LEGAL CONTRACT YOU SIGN THAT GIVES YOU THE RIGHT TO LIVE IN THE RENTAL UNIT FOR A SPECIFIC PERIOD OF TIME

HOW TO RENT AN APARTMENT 13.2

TYPES OF APARTMENTS EFFICIENCY (STUDIO)-ONE ROOM, TYPICALLY VERY SMALL DUPLEX-TWO SEPARATE UNITS GARDEN- TOWNHOUSE-

HOW TO FIND AND EVALUATE APARTMENTS BUDGET TRADEOFFS ABOUT A THIRD OF TAKE HOME PAY FOR HOUSING-INCLUDES RENT OR MORTGAGE, INSURANCE, UTILITIES MAKE A LIST OF PRIORITIES

RENT DEPENDS ON… CONVENIENCE-LOCATION, LOCATION, LOCATION NEIGHBORHOOD-SAFETY ENVIRONMENT-PRIVACY, VIEWS, QUIET SURROUNDINGS AGE-NEWER MORE EXPENSIVE SIZE AND CONDITION- FACILITIES-LAUNDRY, POOL, ETC. PETS-MAY BE AN EXTRA DEPOSIT AND ADDITIONAL RENT. LIMIT ON SIZE, NUMBER, ECT.

WHERE TO FIND LEADS FAMILY AND FRIENDS NEWSPAPERS ADS INTERNET REAL ESTATE AGENCIES APARTMENT MANAGERS

HOW TO EVALUATE AN APARTMENT WHAT IS MONTHLY RENT? WHAT UTILITIES ARE INCLUDED? LENGTH OF LEASE TERM WHAT FACILITIES ARE PROVIDED? PARKING, LAUNDRY, ETC. RULES AND RESTRICTIONS PETS SECURITY DEPOSIT

FILLING OUT A RENTAL APPLICATION MAY ASK FOR INCOME INFO, CURRENT LOANS, AND REQUEST PERMISSION TO OBTAIN YOUR CREDIT REPORT MAY BE A FEE FAIR HOUSING ACT-PROHIBITS DISCRIMINATION IN RENTING OR SELLING PROPERTY

THE LEASE AND MOVING IN RENT DUE DATE LENGTH OF LEASE. USUALLY ANNUAL FOR FIRST YEAR THEN MONTH TO MONTH SECURITIY DEPOSIT-MONEY THE LANDLORD HOLDS TO COVER ANY DAMAGES. RETURNED LESS DAMAGES AFTER YOU MOVE OUT. FIRST MONTHS RENT. SOME REQUIRE LAST MONTHS RENT UP FRONT.

WHO PAYS UTILITIES? GARBAGE IS USUALLY PAID BY LANDLORD (DUMPSTER) SUBLET-SOMEONE TAKING OVER YOUR LEASE. CHECK LEASE. LANDLORDS ARE NOT COMFORTABLE RENTING TO SOMEONE THEY DO NOT KNOW. NOTICE FOR MOVING OUT

CONDITION REPORT WALK THROUGH THE UNIT YOU WILL BE RENTING WITH LANDLORD AND NOTE ANY EXISTING DAMAGE CHANGE MAILING ADDRESS GET UTILITIES SET UP IN YOUR NAME. MAY REQUIRE A DEPOSIT OR A FEE TO HOOK UP.

HOW TO BUY A HOME 13.3

HOW TO PAY FOR A HOME COST OF HOME OWNERSHIP PROPERTY TAXES MORTGAGE PAYMENTS LOOK FOR HOUSES ABOUT 2.5 TIMES YOUR ANNUAL INCOME CLOSING COSTS- A COLLECTION OF FEES TO COVER COST RELATED TO YOUR PURCHASE POINTS- A SERVICE FEE CHARGE BY LENDERS. 1 POINT=1% OF PRINCIPAL

HOMEOWNER’S INSURANCE MORTGAGE INSURANCE- (PMI)-PAYS THE LENDER IF YOU DEFAULT ON YOUR LOAN. REQUIRED IF YOU OWE 78% OF MORE OF YOUR PRINCIPLE Peyton buys a $200,000 house and makes a 10 percent down payment, borrowing $180,000. Peyton has a 740 credit score. Insurance rateLoan amountAnnual premiumMonthly premium Insurance rate: 0.44% per year* Loan amount: $180,000 Annual premium: $792 Monthly premium: $66

TYPES OF MORTGAGES FIXED RATE-SAME INTEREST RATE FOR ENTIRE LOAN ADJUSTABLE RATE MORTGAGE (ARM)-INTEREST RATE CHANGES

SUBPRIME MORTGAGES SUBPRIME LOANS-GIVEN TO THOSE WITH POOR CHARACTER, CAPACITY, CAPITAL. TYPICALLY HIGH INTEREST LOANS. COMMON TERMS WERE A 2/28 ARM EX. $100,000 MORTGAGE: 6% FIRST TWO YEARS AND INCREASE TO 10% INCREASE FROM $ TO $ ($278.02)

RENTING VS. OWNING ADVANTAGES OF RENTING LIMITED RESPONSIBILITY PREDICTABLE COSTS GREATER FLEXIBILITY LESS MAINTENANCE DISADVANTAGES OF RENTING LIMITED CONTROL FINANCIAL LIMITATIONS-RENT MONEY IS GONE FOREVER! FEWER CONVENIENCES PRIVACY

ADVANTAGES OF BUYING INDEPENDENCE INVESTMENT OPPORTUNITY TAX ADVANTAGES FEELING OF SECURITY-SETTLED DOWN DISADVANTAGES OF BUYING MORE MAINTENANCE UNPLANNED EXPENSES REDUCED FLEXIBILITY