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Chapter 6: Buying the Necessities: Housing and Transportation

Chapter 6: Buying the Necessities: Housing and Transportation. Housing Information. Average American Family spends ¼ of income on home 60% of housing units are owned by the people living on them. Types of Housing.

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Chapter 6: Buying the Necessities: Housing and Transportation

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  1. Chapter 6: Buying the Necessities: Housing and Transportation

  2. Housing Information • Average American Family spends ¼ of income on home • 60% of housing units are owned by the people living on them

  3. Types of Housing • Town Homes: Home with individual front and back yards, but common side walls • Usually cheaper, but size and noise are issues • Single Family Home: House separated by neighboring homes • Most expensive to buy and maintain • Real Estate Taxes: taxes paid on land and buildings • Symbolizes the American Dream

  4. Types of Housing Cont’d • Condominiums: Single unit in a complex that is individually owned • Monthly fees are paid for “common area” upkeep • Mobile Home: least expensive to buy and maintain • Suffer greater damage during storms • Depreciate: Decline in value

  5. Lender’s Buying Rules • Purchase Price/Annual Income=2.0 or Less • Mortgage Payment/Monthly Take-home income=Less than 33% • Loan Amount/Value of the Home=95% or less Using rule 1: Would a person making $45,000 a year be able to afford a $100,000 single family home? Using rule 2: Would a person taking home $1500 a month be able to afford a $600 mortgage?

  6. Other Information • Down Payment: Money Paid up front • Closing Costs: Fees in buying a new home • Ex. Inspections, Application fees

  7. Rights and Responsibilities of a Tenant • Lease = long-term agreement describing the terms under which property is rented. • Clauses to avoid in leases • Inability to sue clause • Arbitrary clauses which can have you removed for behavior not outlined in law. Security Deposit – money a renter lets an owner hold, if the rent is not paid or an apartment is damaged, the owner may keep all or part of the deposit.

  8. Rights and Responsibilities of a Tenant • Tenant Rights: • Privacy • Tenant Responsibilities: • Pay rent on time • Care for property/notification of problems • Follow leasing limits • Give notice • Landlord Responsibilities: • minimum services required • Safety laws followed

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