HOW - Home Ownership Overview

MathofFinance_OverviewBanner.png

Home Ownership

Introduction

To rent or to buy? It can be a tough decision! In this microlesson, we will take a look at the expenses that come with purchasing a home using mortgage loans. There are advantages of owning a home, but it is still a very expensive purchase. Take a look below at the unexpected costs of renting and home ownership. Can you think of other advantages and disadvantages of each decision?

Unexpected Costs of Renting

Laundry - Use of a washer and dryer at a laundromat costs $1.50 per load.  Washing 20 loads per month would cost about $720.00 a year!

Parking - Some rentals include parking, but if they don't, the median monthly parking rate is $153.79.

Moving - Moving your stuff into a new rental could cost about $375.00.

Unexpected Costs of Home Ownership

Garbage Collection - Expect to pay about $144.00 - $240.00 a year for curbside pickup.

Pest Control - Be prepared to shell out at least $700.00 to keep spiders, ants, and roaches at bay.

Yard Care - Hiring a gardener or landscaper can cost about $1,200.00 a year!

Security - A security system can cost about $100.00 - $1,500.00 for initial setup and then anywhere from $95.00 - $480.00 a year for monitoring.

Lesson Preview

In this module, we will study the following topics:

Mortgage Loans: Learn about the different options in home mortgage loans and how much interest you will end up paying!

Home Insurance and Taxes: Take a look at the aspects that are involved in home insurance as well as how to calculate real estate taxes. 

Rentals, Condos and Other Costs: Explore your options! What costs are involved in renting versus owning a house? How might we use graphs to help predict future costs?

Reading Floor Plans: Discover the math involved in home repairs that deal with square footage and ordering materials. 

Key Terms

The following key terms will help you understand the content in this module.

  • Asset – Economic resources; anything that is capable of being owned or controlled to produce value.
  • Balloon Payment – When you hold back most of a debt and pay it only towards the end of the agreement; the debt is inflated like a balloon due to compound interest accumulating on the large sum.
  • Closing Costs - Fees for lawyers, credit checks and title searches, taxes, and the preparation of the documents.
  • Down Payment - An initial payment made when something is bought on credit; with mortgages this amount is typically between 10% and 40% of the selling price of the home.
  • Finance Charge – Any fee representing the cost of credit, or the cost of borrowing.
  • Insurance Premium - The amount of money charged by an insurance company for coverage.
  • Interest - A charge for the use of the money of a lending institution.
  • Loan Origination Fee - A fee the bank charges for granting you the loan.
  • Mortgage Loan - A loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the burden of that realty through the granting of a mortgage which secures the loan.

Math_OverviewBottomBanner.png

IMAGES CREATED BY GAVS