3/7/14 “Apartment hunting” 1.What are 4 things that you should do or ask when you go on an apartment visit? 2.What is the first thing that you should do.

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3/7/14 “Apartment hunting” 1.What are 4 things that you should do or ask when you go on an apartment visit? 2.What is the first thing that you should do when a landlord gives you a lease to sign?

3/7/14 Econ. Agenda 1.Buying a home & mortgages (class notes) 2.How much do homes in CF & Pawtucket cost? How much will my mortgage payments be? (online research) HW: Finish “Can you afford a new home?” wksht.

3/7/14Class notes – buying a home 2 factors to consider when considering cost of home: 1.How much do you need to borrow? Down payment is how much $$ you pay up front Larger down payment = smaller loan you have to take out Smaller down payment: Cost of home = $150,000 Down payment = 10% = (150,000)(.10) Down payment = $15,000 Amount have to borrow = 150,000 – 15,000 = $135,000 Larger down payment: Cost of home = $150,000 Down payment = 25% = (150,000)(.25) Down payment = $37,500 Amount have to borrow = 150,000 – 37,500 = $112,500

3/7/14Class notes – buying a home 2 factors to consider when considering cost of home: 2.What type of mortgage do you need to take out? Mortgage: loan you take out to pay for home APR ARM = adjustable rate mortgage FRM = fixed rate mortgage Length of repayment time varies (you choose): 30-year, 15-year, 10-year mortgages

Class Notes – Monthly Payments 30-year mortgage Cost of home = $150,000 # of months in 30 years = (30)(12) = 360 months Monthly payment = 150,000/360 = $ year mortgage Cost of home = $150,000 # of months in 15 years = (15)(12) = 180 months Monthly payment = 150,000/180 = $ Which mortgage will have higher monthly payment?

Class Notes – Amount of Interest 30-year mortgage Cost of home = $150,000 Fixed APR = 7% Formula: A = P (1 + r) ^t A = 150,000 (1.07) ^ 30 A = $1,141, year mortgage Cost of home = $150,000 Fixed APR = 7% Formula: A = P (1 + r) ^t A = 150,000 (1.07) ^ 15 A = $413, Which mortgage will be cheaper overall?

Can you afford a home? Locate 1 home in CF + 1 home in Pawtucket Calculate monthly mortgage payments -> Mortgage calculators

Interest Rates (past 30 years) You born here: 8.5% Today: 3.8%