10-1 Mortgage Loans You have to make a down payment Mortgage Loan Between 10-40% First time homeowners 5% Mortgage Loan Comes from a lender, such as a bank, savings and loan association, credit union, or mortgage company Gives the lender the right to seize and sell the property if you fail to make the payments Formula

10-1 Mortgage Loan Jessica and Kirk consider purchasing a new home for $140,000. A 15% down payment is required. What is the amount of the mortgage loan needed to finance the purchase? Step 1: Find the down payment. Step 2: Find the mortgage loan amount.

10-2 Monthly Payment and Total Interest Amount of money paid for the use of the lender’s money Rate will vary from lender to lender, so it pays to shop around If you know the Interest rate, the amount of the loan, and the length of the loan you can use a table to find the monthly payment, total amount paid and the total interest charge Formula

10-2 Monthly Payment and Total Interest Carol and Adam Burke have applied for an $80,000 mortgage loan at an annual interest rate of 8.00%. The loan is for a period of 30 years and will be paid in equal monthly payments that included interest. What is the total amount of interest charged? Step 1: Find the monthly payment. (Refer to the Monthly Payment for a $1,000 Loan table on Page 799) Step 2: Find the amount paid. Step 3: Find the total interest charged.

10.3 Closing Cost Closing Cost Formula: Some lenders charge a flat fee no matter what the cost is Some lenders charge a percent of the of the amount of the Some lenders charge itemized fees at the closing Closing Cost Fees Lawyers Credit Checks Title Searches Formula:

10.3 Closing Cost Trudy and Germane have been granted a mortgage loan at an annual interest rate of 8% for 25 years by State Bank. The home has a selling price of $95,500. They need a 15% down payment. State bank will allow them to finance the closing cost as part of the mortgage. What are the total closing costs? What is the actual amount financed with the mortgage? Step 1: Find the Down Payment. Step 2: Find the Amount of the Mortgage. Step 3: Find the Closing Costs. Step 4: Find the actual amount financed.

10.3 Closing Cost You’re making a 20% down payment on a home that costs $200,000. Your bank has granted you a mortgage for the remaining amount. The bank charges 3% of the mortgage amount for closing costs. What are the closing cost for your mortgage loan?

10.4 The Monthly Payment Mortgage Loans Figure 10.2 Formulas Repaid in equal monthly payments Includes an amount for payment of interest, and an amount for the principal of the loan Figure 10.2 Formulas Interest = Payment to Principal = New Principal =

10.4 The Monthly Payment Rod and Carey Finn obtained a 30-year, $80,000 mortgage loan from State Bank and Trust. The interest rate is 8%. Their monthly payment is $587.20. For the first payment, what is the interest? What is the payment to principal? What is the new principal? Step 1: Find the interest. Step 2: Find the principal to principal. Step 3: Find the new principal.

10.4 The Monthly Payment The amount of principal that you owe decreases with each payment that you make. The chart shows the interest and principal paid for payment numbers 325,326, and 327 on an original $80,000 mortgage loan. For payment number 328, what is the interest? What is the payment to principal? What is the new principal? Step 1: find the Interest Step 2: find the Payment to Principal. Step 3: Find the New Principal. $80,000 Mortgage Loan at 8% for 30 Years Payment Number Monthly Payment Amount for Interest Amount for Principal Balance $18,517.69 325 $587.20 $123.45 $463.75 $18.053.94 326 587.20 120.36 466.84 17,587.10 327 117.25 469.95 17,117.15

10-5 Real Estate Taxes Real Estate Taxes Taxes collected by the city or county from homeowners to pay for roads, parks, schools, and other public services. The amount of taxes you pay is based on: The Assessed Value is found by using the: Market value: is the price at which a house can be bought or sold Rate of Assessment: percent of the market value of property that is taxed.

10-5 Real Estate Taxes Mills Formula Tax rate will be expressed A mill is $0.001 Tax rate of 80 mills $80 per $1,000 Formula

10-5 Real Estate Taxes The Fulton County tax assessor determined that the market value of Courtland Farm is $340,000. The rate of assessment in Fulton County is 40 percent of market value. The tax rate is 50.73 mills. What is the real estate tax on Courtland Farm? Step 1: Find the assessed value Step 2: Express the tax rate as a decimal Step 3: Find the real estate tax.