1. Housing: A Place To Call Home
Chapter 13
Housing: A Place To Call Home

2. Dorm

3. Building with rooms that colleges rent to students at reasonable prices, usually in large complexes.
Often two or more students share a room
Room rates usually include meals in a cafeteria.
DORM

4. Efficiency Apartment (Studio)

5. Efficiency Apartment (Studio)
Smallest and least expensive type of apartment.
Consists of one room that serves as the living area, bedroom, and kitchen, plus a bathroom.
Separate bedrooms cost more
Efficiency Apartment (Studio)

6. Duplex

7. Duplex An apartment in a building that houses two separate units.
The rooms may be on two floors of the building.
Gives you the feel of living in a house but with a lower cost.
Duplex

8. Condominium
Townhouse

9. A housing unit similar to an apartment that you own rather than rent.
It is often more spacious than a typical rented apartment.
Monthly association fee is usually required.
Condo (Townhouse)

10. Mobile Home

11. A small house on wheels, designed so that owners may have it transported to a rented or purchased space….often in a mobile home community.
You can buy a mobile home for as little as $20,000
Mobile Home

12. Buy or Rent?

13. Costs of Ownership Monthly mortgage payments
Fixed
ARM
Down payment (one time cost)
Closing costs (one time cost)
Utilities – electricity, water, garbage, etc.
Homeowner’s insurance
Real estate property taxes
Maintenance
Costs of Ownership

14. Buying Advantages Disadvantages Ownership Value (Appreciation)
Your own space (privacy)
Fewer Restrictions
Tax-deductible interest and property tax
More room and storage
Improves credit rating
Down payment
High Cost
Property tax
Restricted mobility (if wanting to sell)
More responsibility
Possible depreciation in value
Buying

15. Costs of Renting Monthly rent Security deposit
Utilities – electricity, water, garbage, etc.
Renter’s insurance
Association fees (sometimes)
Costs of Renting

16. Renting Lower cost May be able to save for other expenses
Advantages
Disadvantages
Lower cost
May be able to save for other expenses
Less responsibility
Mobility
Amenities
No ownership
More restrictions (noise levels, changes, pets)
Shared Space
Rent may change with little notice
Fewer opportunities to upgrade
Renting

17. A legal contract you sign that gives you the right to live in the apartment for a specific period of time as long as you pay the rent and follow the contract rules.
Sample Lease
Lease

18. Terms Of A Lease Length of time (6 months, 1 year, etc.)
Rent amount and due date
Amount due for security deposit
Used to cover any damages or repairs that may need to be made.
Pet restrictions
Rules of conduct (noise levels)
Landlord responsibility to make repairs
Notice required before moving out
Terms Of A Lease

19. Tenant The person renting the apartment.
Before signing a lease, make sure you take pictures and document any damage or imperfections that you find so you will not be blamed when you move out!
Tenant

20. The owner of the property
Apartment
House
Townhouse
Etc.
Landlord

21. How to pay for your house
-Mortgages

22. Mortgage A loan used to buy real estate
The property is considered collateral
If you do not repay your loan according to the terms of the mortgage, your property may be foreclosed and become the property of the lender.
Other costs associated with home ownership
Down payment, closing costs, property tax, home owners insurance, utilities, maintenance to house, etc.
Mortgage

23. Property Tax Charged based on the value of your property
Figured into mortgage cost
This amount is held in a escrow account
The lender pays your tax for you out of this account
Property Tax

24. Mortgage Payment Included repayment of principal and interest
Principal: the amount you borrow
To qualify for most mortgages, you will have to make a down payment
Usually this amount is between 10 and 20 % of the cost of the house.
Mortgage Payment

25. Mortgage Payment If you buy a house that is $200,000 Down payment:
$20,000*.10= $20,000
$20,000 *.20= $40,000
The down payment you would need to come up with will be anywhere between $20,000 – $40,000
The mortgage principal would be...
$180,000 for a 10% down payment
$160,000 for a 20% down payment
Mortgage Payment

26. A collection of fees to cover costs related to your purchase.
Appraiser to estimate the property’s value
Title search to make sure property isn’t being used as collateral for another loan.
Closing Costs

27. Types of Mortgages Fixed rate mortgages
Charge the same interest rate for the entire term of the loan.
Usually last from years
Adjustable-rate mortgages (ARM)
Interest rates go up or down as other interest rates in the economy rise or fall.
Contract specifies how often and by how much the rates can be adjusted.
Types of Mortgages

28. Types of Mortgages FHA mortgage
A loan insured by the Federal Housing Administration designed to reduce the down payment.
First time home buyers can sometimes qualify
Mortgage insurance is required to protect lender in this situation
Types of Mortgages

29. Home-Buying Process Appreciate Equity An increase in value overtime.
When selling a house, this is an opportunity to make a profit.
Equity
Difference between what the home is worth and what the buyer still owes on the mortgage.
You can use equity in your home as collateral to borrow for other purposes. This is called a home equity loan.
Home-Buying Process

30. When you have chosen a house you want, you make an offer.
A proposal to buy the house for a stated price.
You should always offer below the listed price!
Your agent will present your offer to the seller, if the seller accepts your price... You have a deal. If they do not accept your price, they can make a counteroffer.
A counteroffer will be higher than your offer, but lower than the listed price.
Making an Offer

31. Once you and the seller agree on a price, you will need to make a deposit.
The deposit is a small percentage (1-3%) of the purchase price.
The deposit is called earnest money
This is proof of your intention to buy at the agreed-upon price.
If you change your mind, you forfeit your money to the seller...otherwise this amount becomes part of your down payment.
Complete the deal

32. Apartment Search Rent budget = 30% monthly gross pay maximum rent
Roommate option = must have your own bedroom
Helpful websites:
1. Apartments.com
2. Forrent.com
3. Rent.com
Apartment Search

33. Rent Vs. Buy Calculator