1. Home Buying By:Charlotte Haws, Jake Cushing, Chad Shehee

2. Overview Jennifer Barry 25 yrs. old graduated college with $23,300 in debt. $16,000 student loans, $7,300 owed on two credit cards. shares apartment with friend. Rent is $350/mo. earns $28,900 annually ($2,408 per month)

3. Rental Pros 1. No Down Payment 2. Avoid Risk of Falling House Prices. 3. No maintenance charge. Cons 1.She does not have renters insurance. 2.Rent is not always constant, it can change. 3.She is putting money towards somebody else's house.

4. Non-Traditional Pros 1. Less Restrictions from lenders. 2. Cheaper 3. It might not have to get inspected. Cons 1.There is little protection involved. 2. She might end up paying more. 3. She might pick up title issues which are debt from the house's previous owner.

5. Condo/ Apartment Cost: 74,000 Down Payment:14,800 Monthly Payment: 356$ 30 year: 356 $ 20 year:417$ 15 year:$476 2220 E Murray Holladay Rd Salt Lake City, UT 84117

6. Modest House Pros 1. It can be cheaper for her. 2. She has the bare necessities. 3. She might be able to sell it easier. Cons 1.She will live in a tight space. 2. There is nothing to special about the place. 3. It might be hard to sell.

7. Extravagant House Pros 1. It’s nice and fancy. 2. She has what she wants. 3. It is fun to show off to her friends. Cons 1.It will be more expensive. 2.She might not be able to borrow as much from the bank. 3.There will be more maintenance required.

8. Extravagant Home Cost: $359,900 Down Payment:71,980 15 year: 2,317 20 year: 2,030 30 year:1,672 8000 N / 526 W RP30973 Saratoga Springs, UT 84045

9. Renting VS. Buying Renting No groundskeeping required No Property taxes She will be immuned to losses due to housing price depreciation Buying Allows you to build up equity over time. No chance of rent rising over time. Possibility of property’s appreciation.

10. Needs/Wants Needs to make a plan so she can buy a home and a car within 10 Years. She wants to purchase a house and a new car within 10 years. Needs a place to live, transportation to work.

11. Budget: What can we afford? Jennifer Barry’s annual income: $28,900 Monthly Salary: $2,400 28% of monthly salary to Mortgage payment: $675 Max monthly mortgage payment: $475 House Maximum Price:$80,000-$85,000 Down Payment on house is 20% of the cost

12. Only Affordable house BuyinG Down Payment House Price: $73,800 20% down payment: $14,760 In this situation, a down payment of $14,760 is not realistic, she has made a plan to start saving money, but first needs to put it into action for a longer amount of time and needs to pay off outstanding debts.

13. Closing Costs  Many factors determine the closing costs, the loan fee, loan application, appraisal fee, and other fees and costs.  closing cost in this situation would be 7% of the homes price.  $5,166 is the closing costs.

14. Home Appreciation The definition of Home Appreciation is an increase in value of your home over time. 1. What determines the value of your property? a. The land your property sits on is the biggest part of your home appreciation. No one else has that land, it's never going to go away and disappear so the more land your house sits on, in theory the more it shall be worth. b. Second is location, location, location. It even affects your land's value. c. Lastly is the upgrades, amenities or the popular features your home may have. Such as people prefer hardwood floors vs. carpets which up your home's worth.

15. Investing Gives you a 10% interest earning back potential from the stock market Good idea to not be house poor so you can put money into the stock market and make more money

16. Home Appreciation VS. Investing It's good to invest into buying a home if it's the right time for you When you buy a home don't get the nice house that makes you house poor you can be using that money for investing into the stock market. Investing in the stock market will give you a greater return in the long run

17. Smart Buying Tips 1. Differentiate want from need -she wants a new house and new car. -needs a place to live and transportation to work. 2. Do your Homework -She needs to figure out her budget for her car and house. -compare many properties before making a decision. -research location, and neighborhood. 3. Make your Purchase -Look at different finance alternatives - negotiate a lower price. (if Possible) - find out monthly cost and make sure it fits into your budget. 4. Maintain your Purchase - maintain appearance of purchase. -Resolve any issues.

18. Current Plan of Action oVERVIEW Jennifer Barry’s best option is to rent somewhere until she has paid off more of her debts and has a higher income before trying to buy a house. So in the next five years she is saving $160 each month for a car. Her savings account earns a 6% interest rate so in five years she will have 11,163.21 to put towards a new car. And in 10 years she is saving $130 each month a downpayment for a house her interest on that savings account is 6% so in 10 years she will have $21,304.32 to put towards buying a house

19. Current Plan of Action Budget Monthly Expenses Rent:$350 Debt payments:$320 But we want to up her debt payments to $450 each month instead. Food:$400 Gas:$120 Fun, Shopping:$350 Insurance:$200 Car Savings:$150 House Savings:$130