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Bell Ringer

Learn about mortgages, creditworthiness, and down payments to make your dream of owning a home a reality. Discover how to compare mortgage options and become a savvy borrower.

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Bell Ringer

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  1. Bell Ringer When do you plan to buy (not rent) your own house?

  2. Your Dream House… • Describe your dream house… is it like the latest celebrity mansion they’ve seen on TV: 10 bedrooms, hot tub, pool, game room, gym, home theatre. • It’s easy to get caught up in glamorous amenities and overlook the realities of purchasing a home. • Today we will help students understand the components of a mortgage, how to compare mortgage options and how to become savvy borrowers.

  3. Let’s Backtrack • Remember when we talked about if you have ever loaned something to a friend like money, a laptop or music? • How could you be sure your friend would return the item or repay the money. • What factors did you consider when loaning something to a friend?

  4. Mortgage • Asking for money to buy a house is not a gift but a mortgage. A mortgage is a type of loan borrowed from a bank or credit union and paid back within a certain timeframe. • If you have good credit, collateral and the ability to make a down payment—all of which make you a better candidate for a mortgage than someone with bad credit.

  5. Ideal scenario • Have good credit, collateral and the ability to make a down payment • We make mortgage payments every month, but it can take many years to pay off the entire amount—often 30 years. When taking out a mortgage, banks also charge interest on the money borrowed, and a down payment is required to secure a loan, most commonly set at 20%.

  6. Why the down payment? • Why do you think you would need a down payment? • How can credit affect a person’s ability to get a mortgage? Why? What makes someone a good borrower?

  7. Why the down payment? • “Creditworthiness” is considered when applying for a mortgage. An especially important warning sign for mortgage lenders is a foreclosure. A foreclosure is when someone stops making payments on a mortgage and the lender forces the sale of the home to recoup the borrowed money. • People can go into foreclosure for a variety of reasons: • medical conditions that limit employment, • snowballing debt, • Job loss • divorce, etc. 13. Even if buying a home seems far off in the future, “creditworthiness” will also impact your ability to rent an apartment. This is one reason it is so important to build and maintain good credit.

  8. Why the down payment? • What can you do to make your dream homes a reality

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