1. 6.03 -B Students will be able to understand options and practices for meeting housing needs.

2. 6.03 Essential Questions What are the options for meeting housing needs? What are advantages/disadvantages of renting and things to look for before signing a lease? What are advantages/disadvantages of buying and procedures in buying a home?

3. Options for meeting housing needs 1. Housing wants and needs 2. Types of housing available 3. Basic housing options

4. Housing Wants and Needs Before making a decision, determine wants/needs based on the following criteria: Number of persons in family Stage of individual/family life cycle How individuals/family prefer to spend their time What one can afford Preferred housing location---e.g., educational, work, and shopping opportunities

5. Types of Housing Available Choice based on wants and needs Apartments – buildings that houses more than one family in separate living units, rented by tenants Condominium – buildings that house more than one family; person owns the unit occupied Cooperative – a person buys shares in a corporation that owns/manages the property; owners pay for their share of maintenance and service costs, building mortgage and taxes Single-family houses – custom- built, development, modular, or kit houses/townhouses, may rent or own Manufactured, “mobile” homes – single-wide or double-wide moveable home Duplex – one building that contains two separate living units Townhouse – a dwelling of two or three stories that attaches at sidewalls to other units Residence hall – aka dormitory - usually college/university campuses; available to attending students only

6. Rent or Own? Choice is Yours Renting/leasing Paying a security deposit and monthly payment to a landlord Rent is month to month Leasing is a contract for a specified time Buying Purchasing with cash or A down payment plus monthly installment loan mortgage payments

7. Pros & Cons of Renting/Leasing* ADVANTAGES DISADVANTAGES Fewer long term financial responsibilities Less financial risk More free time due to fewer maintenance responsibilities Greater mobility LEASE- a contractual agreement for a specified term No equity Less authority to make changes in the living space No tax benefits

8. Before Signing Lease… Things to inspect in rental units before signing a lease Are exteriors neat and well- maintained Common areas in good condition* see next slide Safety and security How’s inside the unit---size, space, appliances, furnishings, maintenance, privacy, noise, paint, layout, etc. Cost and type of utilities and systems---heat, air, plumbing, etc. Do your understand your lease agreement? Rights & Responsibilities of landlord Rights & Responsibilities of tenant Terminology in lease Conditions, such as Sublease Late fees Pets

9. Common Areas Any areas used by all tenants or homeowners Maintained by landlord or homeowner’s association for common benefit Homeowner’s association dues usually paid monthly Committees and boards make rules for running community Parking areas Pool Golf course Tennis courts Playground Basketball goal Laundry facilities Clubhouse Entrance Nature, hiking trails Ponds, Gazebos, Landscaping

10. Rights and Responsibilities Implied warranty of habitability by landlord Expects reasonable wear and tear by tenant Right of eviction Responsible for certain injuries Abide by landlord/tenant agreement Right to quiet enjoyment Pay rent on time Due process before eviction Vacate premise when lease expires Responsible for certain injuries Abide by landlord/tenant agreement LandlordTenant

11. Pros & Cons of Buying ADVANTAGES DISADVANTAGES Buying is an investment and increases one’s wealth (equity) Have authority to make changes in the living space There are tax benefits- mortgage interest is deductible, property taxes are deductible Pride of ownership Requires down payment Greater costs and financial responsibilities Greater financial risk Less mobility If buying jointly, relationships become more complicated

12. Procedures in purchasing a home Find an appropriate home to meet your needs Make an offer Meet contingencies - any conditions that must be met in order for the deal to occur---e.g., ability to obtain financing, inspectors’ reports, completion of repairs, selling prior home Negotiate to reach an agreement – offer and counteroffer to meet price Make a commitment with EARNEST MONEY – small % of contract price to let seller know you want house and bind the contract until you can get your loan! Qualify for a loan Attend the closing with seller, lender (bank representative), real estate agents, attorney(s)

13. Cost of Buying a Home Down payment Larger amount paid, lower monthly payments, better % rate Closing costs Attorney fees, title research, short term interest, insurance & taxes Escrow account – Added to monthly payment to cover ongoing expenses Insurance Property Taxes Continuing costs Monthly installment loan payments covering principle & interest Utilities Maintenance-yard, major appliances, roof, heat A/C unit Property Taxes

14. Types of Mortgages Conventional - fixed rate mortgage Adjustable rate mortgage (ARM)  Government Agencies special loans FHA loans – Federal Housing Administration VA loans – Veteran’s Administration through Department of Veterans Affairs Who qualifies as a veteran?