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Name:___________________________Hour:___________________________ECON PROJECT—HOUSING WORKSHEETFind a house for sale that you like using Zillow. Answer the following questions about the house.What is the address?What is the list price?What is the total square footage?How many bedrooms?How many bathrooms?What school district is it in?Is it city water and sewer, or well and septic?What is the exterior material of the house?Now that you have a property picked out, determine the down payment. This is the cash payment that you will have to put down on the house in order to secure a mortgage. Banks don’t want to finance the entire cost of the house upfront, because if you stop making your mortgage payments, then they will be on the hook for the entire loan.To calculate the down payment amount, multiple the total cost of the house by 20% (or, 0.2). Write that number here:The remaining 80% of the house purchase price is the Principal on your mortgage. Principal is the total amount of money you are paying off each month on the house itself (not including taxes and other fees). Mortgages tend to be backloaded, in that you are paying off more principal toward the end of the mortgage than at the beginning of it.What is the total amount of principal on your mortgage?The amount that you just wrote down for #3 is also equal to your mortgage. Now, calculate your Interest rate, which is the first “I” in “PITI.” Assume a starting point of 4% interest.If you are married (in the consumer project, according to your Consumer ID), reduce your interest rate by a quarter of a percentage point.If your spouse works outside the home, reduce your interest rate by a quarter of a percentage point.If you have children, increase your interest rate by a quarter of a percentage point for each child you have.Write your final interest rate here:Taxes are the “T” in “PITI,” and they’re pretty straightforward to figure out. To calculate the property taxes, go to the “Price/Tax History” tab on the Zillow listing and scroll down until you find the tax history for the property. Use the most recent number available (probably 2014). This number is the annual property tax paid by the homeowners.What is your annual property tax payment?Divide this number by twelve to calculate your monthly property tax payment.The second “I” stands for Insurance. This is a pretty standard cost for most people, unless you are a pyromaniac who also makes bombs in the garage. If the purchase price of your home is more than $250,000, assume an insurance cost of $100 per month. If the cost of the house is less than that, assume an insurance cost of $80 per month. Write your monthly insurance cost here:Write your annual insurance cost here (multiple the last answer by 12):Now, go to and calculate your informationFirst, click the down-pointing arrow on the left side of the screen that says “Advanced Options.”Next, enter your home price, as determined by your answer from #1b.Enter your down payment amount, as determined by your answer to #2.Enter your interest rate, as determined by your answer to #4d.Leave loan term at 30 years.Leave “Included taxes/ins.” checked.Enter your annual property tax amount from #5a.Enter your annual home insurance cost from #6b.Uncheck the box that says “Include PMI.” Don’t worry about the HOA box (Homeowners Association Fees) unless you’re buying a condo or living in a gated community.What is your total monthly payment (the whole PITI, taken together)?Is this less than or equal to 45% of your household’s monthly gross (pre-tax) income?If yes, you can have the house.If no, start over. You can’t afford this house.RENTINGAddress and Description(# of Beds/Bath, Sq. Footage, 1 or 2 Story, garage? etc.)Financial InfoExtrasMonthly Rent:Security/Pet Deposit:Amenities? (pool, clubhouse etc?)Late Fee:Utilities included in Rent:Utilities not included in rent:Avg. Monthly expense?What are the advantages of renting?What are the disadvantages of renting?Housing Reflection:After you have checked out a few places and compared the pros and cons of renting vs. purchasing a home, determine which option you would likely choose. Remember, although price is often a major determinant in selecting a place to live, it is rarely the only determinant. Other factors that may influence your decision might be maintenance requirements, location, access to extras like pool/weight room and closeness of neighbors.Your reflection should be at least one page, typed, and should explain your decision-making process. If you have question, check in with me. ................
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