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Activity A: Mortgage terminologyName: Date:MORTGAGE TERMEXPLANATIONS and COMPARISONConventional or High-ratioFixed rate or Variable-rateShort-term or Long-termOpen or ClosedActivity B: How much house can you afford?Visit practicalmoneyskills.ca and follow the links to Calculators → Home & Mortgage → How Much House Can You Afford?Input each of the two different scenarios into this calculator and determine how much of a house you can afford.Scenario 1Scenario 2How much do you have saved for a down payment?$10,000$10,000How quickly do you want to pay off your house?15 yr mortgage15 yr mortgageHow much can you afford to pay toward a house payment each month?$1,000$1,000What interest rate do you think you can find on a mortgage?6%6%Anticipated closing costs?$800$800Loan origination rate?1.0%1.0%Property tax rate?3.0%3.0%Homeowner’s insurance rate?0.5%0.5%How much of a house can I afford?Scenario 1Scenario 2What do you think makes the difference?Activity C: MortgagesVisit in the blanks in the chart below using the payment calculator.Interest Rate (%)Frequency of PaymentsMortgage AmountAmortization PeriodPayment ($)Total Interest ($)13.5Monthly$200,00025 years23.5Monthly$200,00020 years33.0Monthly$200,00015 years43.0Bi-monthly$200,00015 years53.0Accelerated bi-monthly$200,000yearsWhat are the advantages and disadvantages of each different scenario?AdvantagesDisadvantagesAmortization25 years20 yearsFrequency of PaymentsMonthlyBi-monthlyAccelerated bi-monthlyWhat is the difference between bi-monthly and accelerated bi-monthly payments? ................
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