‘trade-offs’ interest › lost with a down payment/security deposit commuting › driving to...
TRANSCRIPT
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The Finances of HousingChapter 9
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Chapters 9.1-9.2
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Opportunity Costs of Housing Choices
‘Trade-Offs’ Interest
› Lost with a down payment/security deposit Commuting
› Driving to work daily› Time vs Cost
Time & Money› Lower/older priced homes
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BRAINSTORM
Respond in your notes Textbook page 274 Figure 1 Question
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Renting vs Buying
Housing Source Information› Libraries› Newspapers› Real Estate Agents› Government Agencies
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BRAINSTORM
What decisions about housing will be determined by your personal lifestyle?
As of right now, what is important for you to have in your first place?
Record answers in your notes
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Renting an ApartmentAdvantages
Mobility Low maintenance Low financial comitment
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Renting an ApartmentDisadvantages
No tax advantages Less pricy
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Figure 4: A Typical Lease Agreement
Textbook pg 281 Respond in your notes:
› Which parts of a lease are most likely to be negotiable?
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Figure 5: Finding and Living in Rental Housing
Textbook pg 282 Respond in your notes:
› How does the lease protect the tenant and the landlord?
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Homework
Complete the following end of the section assessments:› Page 276 # 1-4, 6› Page 283 # 1-4, 6
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Chapter 9.3
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Owning a HomeAdvantages
Pride of ownership Plenty of space Tax benefits
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Owning a Home Disadvantages
Financial commitment High living expense Limited mobility
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BRAINSTORM
How would you begin an apartment search?
Which features would be most important to you?› Location› Size/Cost› Building Amenities› Layout
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Features
Size vs Cost
Tenant› Pays for the right to live in your rental› Owned by someone else
Landlord› Owns the property that is being rented
Complex
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Location
What are some areas/places people want to live near?
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Finances
What are some costs to consider when selecting a rental unit?
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Building
What are some factors about the building/complex that are important to consider?
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Layout & Facilities
How does the layout of the apartment/complex and the facilities it offers play a role in renting a unit?
What do you believe people are looking for?
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DECODING THE MESSAGE
Read the listing for an apartment that is in your notes. Can you decipher what they are advertising for rent?
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Advantages of Renting
Greater mobility Few Responsibilities Lower Initial Cost
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Disadvantages of Renting
Financial and Lifestyle Restrictions Legal Issues
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BRAINSTORM
How does the lease protect the tenant and the landlord?
Record thoughts in your notes
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The Cost of Renting
Factors that determine cost:› Location› Living Space› Utilities› Security Deposits› Renters Insurance
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Guided Practice
Renting vs Buying Worksheet Examining
› Lease Agreement› Rental Agreement› What's the difference?
Be prepared to discuss your thoughts
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Buying a Home: Affordability and Your Needs
Price and Down Payment Size and Quality ‘Trading Up’ Location
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5 Steps in Buying a Home
Determine your ownership needs Find and evaluate a property Price the property Obtain financing Close
› Insurance› Home inspection› Appraisal› Credit report› Land transfer tax› Interest paid in advance?
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Document Detectives
Mortgage amount is determined by:› Income, amount available for down
payment, current market rates
Calculating the costs of mortgages Page 289 Record answers – discuss
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Real Estate Agent
Great source of homes = location, availability, negotiators › Sellers› Buyers
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Determining the Life of the Home
Topics to consider when making an offer:› Length on the market› Competition› “Seller’s Market” vs “Buyer’s Market”› Current owners› Meeting your needs› Financing› Taxes and Insurance
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Around the World
Italy Page 293 Record answers - discuss
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Types of Mortgages
Fixed-Rate Mortgages Adjustable-Rate Mortgages Government Financing Program
› FHA Home Equity Loans Refinancing
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Computing Mortgage Payments Worksheet