1. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved1 Introduction New and exotic types of Home Mortgages appear on a regular basis This proliferation of mortgages creates a dilemma for first-time homebuyers Each new type makes it harder to select the right one It also increases the chances of making a costly mistake Knowledge is your best defense against selecting a mortgage that is not appropriate for you

2. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved2 Objectives You should be able to do the following after completing this lesson. Identify businesses that provide home mortgages List the 3 primary types of home mortgages Review the common mistakes first-time buyers make Contrast a conventional and a government mortgage Describe how a loan amortization works Name 4 things that can be included in the monthly payment Identify the factors that define a home mortgage Define the key terms introduced in this lesson

3. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved3 11.4.1 – Fixed-Rate, Variable Rate and Hybrid Mortgages What the 3 primary types of mortgages are How an adjustable rate mortgage loan works How a fixed-rate mortgage loan works What the common Terms for a home loan are How a hybrid mortgage loan works In this section, you will learn Adjustable Rate Comparison Exercise You will run the following Interactive Exercise

4. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved4 11.4.2 – Common Mortgage Mistakes How you can avoid the common mortgages mistakes How to determine how much home you can afford In this section, you will learn When an ARM is most appropriate When an FRM is most appropriate How much the down payment should be Why you should always pay discount points at closing

5. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved5 11.4.3 – Conventional and Government Mortgages What mortgage insurance does What a government mortgage is What a conventional home mortgage is When mortgage lenders require mortgage insurance What federal agencies offer government home mortgages In this section, you will learn

6. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved6 11.4.4 – Loan Amortization How a loan amortization works What components can be included in the monthly payment What the principal component represents In this section, you will learn What the interest component represents What the taxes & insurance components are used for How mortgage insurance and homeowner’s insurance are different Loan Amortization Exercise You will run the following Interactive Exercise

7. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved7 11.4.5 – Home Mortgage Factors Why the interest rate is important How the down payment affects the home mortgage What the primary factors affecting a home mortgage are How the term of the loan affects the home mortgage In this section, you will learn How the selling price affects the home mortgage Mortgage Factors Exercise You will run the following Interactive Exercise

8. Lesson 11.4 Home Mortgages July 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved8 Discussion Questions Why is home equity so important? Why is a negative amortization mortgage dangerous to the homeowner?