The Finances of Housing

1. The Finances of Housing Chapter 9

2. Chapters 9.1-9.2

3. 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

4. BRAINSTORM • Respond in your notes • Textbook page 274 • Figure 1 Question

5. Renting vs Buying • Housing Source Information • Libraries • Newspapers • Real Estate Agents • Government Agencies

6. 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

7. Renting an ApartmentAdvantages • Mobility • Low maintenance • Low financial comitment

8. Renting an ApartmentDisadvantages • No tax advantages • Less pricy

9. Figure 4: A Typical Lease Agreement • Textbook pg 281 • Respond in your notes: • Which parts of a lease are most likely to be negotiable?

10. 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?

11. Homework • Complete the following end of the section assessments: • Page 276 # 1-4, 6 • Page 283 # 1-4, 6

12. Chapter 9.3

13. Owning a HomeAdvantages • Pride of ownership • Plenty of space • Tax benefits

14. Owning a Home Disadvantages • Financial commitment • High living expense • Limited mobility

15. BRAINSTORM • How would you begin an apartment search? • Which features would be most important to you? • Location • Size/Cost • Building Amenities • Layout

16. 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

17. Location • What are some areas/places people want to live near?

18. Finances • What are some costs to consider when selecting a rental unit?

19. Building • What are some factors about the building/complex that are important to consider?

20. 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?

21. DECODING THE MESSAGE • Read the listing for an apartment that is in your notes. Can you decipher what they are advertising for rent?

22. Advantages of Renting • Greater mobility • Few Responsibilities • Lower Initial Cost

23. Disadvantages of Renting • Financial and Lifestyle Restrictions • Legal Issues

24. BRAINSTORM • How does the lease protect the tenant and the landlord? • Record thoughts in your notes

25. The Cost of Renting • Factors that determine cost: • Location • Living Space • Utilities • Security Deposits • Renters Insurance

26. Guided Practice • Renting vs Buying Worksheet • Examining • Lease Agreement • Rental Agreement • What's the difference? • Be prepared to discuss your thoughts

27. Buying a Home: Affordability and Your Needs • Price and Down Payment • Size and Quality • ‘Trading Up’ • Location

28. 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?

29. 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

30. Real Estate Agent • Great source of homes = location, availability, negotiators • Sellers • Buyers

31. 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

32. Around the World • Italy • Page 293 • Record answers - discuss

33. Types of Mortgages • Fixed-Rate Mortgages • Adjustable-Rate Mortgages • Government Financing Program • FHA • Home Equity Loans • Refinancing

34. Computing Mortgage Payments Worksheet