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