Buying a House Project - Hillgrove
Buying a House
Introduction
It is a very big decision to become a first-time homeowner. Many things need to be considered. Three important factors are the price of a home, mortgage interest rates and a person’s salary. In this section, you will look at current values for these three factors. You will see how these factors affect the mortgage you can afford.
Part I: Pre-qualification
Use the Pre-qualification Calculator web site and determine the price of a home you can afford for each of the three jobs you chose. You will calculate a 15 and 30-year mortgage for each.
| |Job #1 |Job #2 |Job #3 |
|Gross Monthly Income | | | |
|Total Debt Payment |$0 |$0 |$0 |
|Qualifying Purchase | | | |
|Price (Choose one | | | |
|price per job from the| | | |
|table above) | | | |
|Total Price of Home | | | |
|found on Zillow | | | |
|City & State | | | |
|Square Footage | | | |
|# of Bedrooms | | | |
|# of Bathrooms | | | |
|Year Built | | | |
|Now you will calculate your mortgage payment for each home using the previous link, the price of each home, the length of the mortgage you chose based on your |
|qualifying purchase price (15 or 30 years), down payment of $0, and the annual interest rate from the table above |
|Monthly Mortgage | | | |
|Payment | | | |
|Amount allotted for | | | |
|Housing per your | | | |
|Budget Check (Day 2) | | | |
|(Housing amount from | | | |
|Day 2) -(Monthly | | | |
|Mortgage Payment) = | | | |
|Does this house fit | | | |
|your budget from Day | | | |
|2? | | | |
|From the mortgage | | | |
|calculator: (Total | | | |
|Principle Paid) + | | | |
|(Total Interest Paid) | | | |
|= | | | |
Questions:
1) Which house and mortgage best fit your needs AND your budget?
2) Did you need to make any adjustments to your home purchase to fit your budget? What sacrifices did you need to make? What luxuries could you afford that you were not expecting?
3) If you were to buy one of these houses, what changes would you make to the type of mortgage, length of mortgage, interest rate, and down payment? (Give your reasoning/WHY behind your changes)
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