SECTION 10-1 pp. 344-345 Mortgage Loans.

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Presentation transcript:

SECTION 10-1 pp. 344-345 Mortgage Loans

Section Objective Compute: mortgage loan amount

Key Words to Know mortgage loan (p. 344) A property loan that gives the lender the right to seize and sell the property if the borrower fails to make the payments on the loan.

Formula Mortgage Loan = Selling – Down Amount Price Payment

The Hunt to Find a Home p. 344 Why do you think a majority of homeowners take out 15- to 30-year mortgages as opposed to a 5-year mortgage?

Example 1 Jessica and Kirk Cramer consider purchasing a new home for $140,000. A 15 percent down payment is required. What is the amount of the mortgage loan needed to finance the purchase?

Example 1 Answer: Step 1 Find the down payment. $140,000 × 15% = $21,000

Example 1 Answer: Step 2 Find the mortgage loan amount. Selling Price – Down Payment $140,000 – $21,000 = $119,000

Practice 1 Santos and Anna Rivera made an offer of $158,000 on a home that was priced at $164,000. Their offer was accepted. They made a down payment of 25 percent and financed the remaining amount. What is the amount of the mortgage?

Practice 1 Answer $118,500

Practice 2 Mary Schoen is buying a house that costs $179,000. She made a 25 percent down payment. What is the amount of the mortgage loan needed to finance the purchase?

Practice 2 Answer $134,250

END OF SECTION 10-1 Mortgage Loans