2. Basic Rules 1.Purchase price/annual income = 2.0 or less 2.Monthly pmt = 33% or less of monthly pay check.

3. What would be the pros/cons of owning your own home? Talk to a neighbor and jot down any that you can think of.

4. Pros Build equity — your wealth will increase as you gain more home equity Tax advantages – get to subtract from your overall bill Stabilize your payments — monthly payments are relatively steady if your loan has a fixed interest rate, while your landlord can increase the rent Have a secure place for your family to live — a home provides a permanent place where your family can live and grow, and you can decorate or expand a house the way you like to create your dream home Gain a sense of community — homeowners often are more involved in the well-being of their communities; many homeowners work together for better schools and less crime Cons Maintenance costs — it takes work and money to keep a home in good condition Ties up your cash — selling the house may not be possible during the first few years of ownership; moving is more difficult and complicated and you may not have as much flexibility in choosing a new job location Can fluctuate in value — there is no guarantee that your home will increase in value; it could decrease in value Obligates your finances — when you buy a home, you are obligated to a set monthly payment

5. What would be the pros/cons of renting your own home? Talk to a neighbor and jot down any that you can think of.

6. Pros Mobility – easy to get up and move somewhere else Cost – typically it is less expensive then owning a home No maintenance costs Cons No equity – all past payments are lost Can’t personalize as easy Privacy Pets – some apartments don’t allow pets Is there a yard available for use?

7. Basic Rules 1.Purchase price/annual income = 2.0 or less 2.Monthly pmt = 33% or less of monthly pay check.

8. Basic Rules 1.Purchase price/annual income = 2.0 or less 2.Monthly pmt = 33% or less of monthly pay check. Pretend you have finished school and are ready to live on your own. Decide if you would like to own/rent. Go online and find a home/apt in the Sioux City area and see what you might be able to afford. How do prices in Sioux City compare to LA?