Consumer 40S



EMA40S Unit 1 Test: Home Finance

Name: _____________

Date: ___________

Read each question carefully. 

Show you work whenever you can.

Round each answer to two decimal places, and include the units in your final answer.

Good luck! 

Amortization Period of Mortgage Loans Table

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1. Tyra is going to buy a home a home selling for $200 000 and she has a $30 000 down payment. She can get a closed mortgage at 7.00% with a 25 year amortization period.

a. How much is Tyra’s mortgage? (1 mark)

b. Calculate Tyra’s monthly payment. (1 mark)

c. Calculate the amount of interest she pays with her first payment. (1 mark)

d. Calculate the amount of principal paid after the first payment. (1 mark)

e. Calculate the amount of equity after the first payment. (1 mark)

f. How much has Tyra paid for her home IN TOTAL after the 25 year amortization period? (1 mark)

g. How much has Tyra paid in interest after the 25 years? (1 mark)

2. Hunter’s property has a total assessed value of $150 000. The portioned percentage on his property is 45%.

The frontage of Hunter’s property is 50 ft.

The Municipal Tax Rate is 12.5 mills.

There is an Annual Property Improvement Tax for the sidewalks which is $3.29/ft.

The Provincial Education Tax Mill Rate is 8.94 and the School Division Tax Mill Rate is 21.5 mills.

The Provincial Tax Credit this year is $250.

a. Calculate the total portioned assessment value of Hunter’s property (1 mark)

b. Calculate Hunter’s Total Municipal Tax Bill (2 marks)

c. Calculate Hunter’s Education Tax Bill (2 marks)

d. Calculate Hunter’s total property tax bill for this year. (2 marks)

3. List an advantage and disadvantage for renting vs. owning a house. (4 marks)

| |Renting |Owning |

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4. Explain why it is important to have homeowners or tenant insurance. (1 mark)

5. Shanelle wants a Comprehensive policy to insure a $190 000 home in Winnipeg.

a. Calculate the annual payment with a $500.00 deductible. (1 mark)

b. Calculate the annual payment with a $200.00 deductible. (2 marks)

6. State one of the five main factors that determine the cost of homeowners insurance. (1 mark)

7. List two types of additional or one-time costs to consider when initially purchasing a home. Do not include the down payment or mortgage payment. Explain these costs. (4 marks)

Additional Cost Explanation

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8. Matao is purchasing a property valued at $192 000. The land transfer tax is calculated as follows:

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Calculate the total land transfer tax due. (2 marks)

9. Explain the difference between daily maintenance and emergency repairs in a home. (2 marks)

10. Explain one thing you can do in your house to save money on energy costs? (Heating or electrical related) (1 mark)

11. Jacob wants to buy a washing machine.

▪ Front-loading washers use 75 L less per load than top-loading washers.

▪ Jacob averages five loads of washing per week.

▪ He pays $3.85/1000 L of water.

How much will Jacob save per year on his water bill if he buys a front-loading washer? (2 marks)

12. Taylor wants to buy a home. Her gross ANNUAL income is $36 000 and her home has a $700 mortgage payment. She will also have to pay $150 in heat per month and $200 in property taxes per month.

a. Calculate Taylor’s GDSR. (2 marks).

b. Can Taylor afford this home? Explain why or why not. (1 mark)

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