1. Entrance Ticket
What are 4 things that you should do or ask when you go on an apartment visit?

2. Agenda 1) Intro to Mortgages 2) House Hunting! 3) Exit Ticket
4) HW: College Debt and Home Ownership

3. 2 factors to consider when considering cost of home:
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

4. 2 factors to consider when considering cost of home:
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

5. Which mortgage will have higher monthly payment?
Monthly Payments
Which mortgage will have higher monthly payment?
30-year mortgage
15-year mortgage
Cost of home = $150,000
# of months in 30 years =
(30)(12) =
360 months
Monthly payment =
150,000/360 =
$416.67
Cost of home = $150,000
# of months in 15 years =
(15)(12) =
180 months
Monthly payment =
150,000/180 =
$833.33

6. Amount of Compounded Interest
Which mortgage will be cheaper overall?
30-year mortgage
15-year mortgage
Cost of home = $150,000
Fixed APR = 7%
Formula:
CI = P [(1 + r) ^t – 1]
CI =
B =
Cost of home = $150,000
Fixed APR = 7%
Formula:
CI = P [(1 + r) ^t -1 ]
CI =
B =

7. Can you afford a home? www.realtor.com
Locate 1 home in CF + 1 home in Pawtucket
Calculate monthly mortgage payments
-> Mortgage calculators
Complete sheet

8. Exit Ticket
What are some key calculations you have to make when agreeing to a mortgage?