1 / 11

Section 10.4 Home Ownership

Example. The purchase price of a home is $98,000. A down payment of 20% is made. The bank charges $450 in fees plus 2 and

rosie
Download Presentation

Section 10.4 Home Ownership

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. Section 10.4 Home Ownership The mortgage is the amount that is borrowed to buy the real estate. The amount of the mortgage is the difference between the selling price and the down payment. Mortgage = selling price - down payment This formula is used to find the amount of the mortgage.

    2. Example The purchase price of a home is $98,000. A down payment of 20% is made. The bank charges $450 in fees plus 2 and ˝ points. Find the total of the down payment add the closing costs.

    3. Mortgages When a bank agrees to provide you with a mortgage, you agree to payoff that loan in monthly payments.

    4. Mortgage The monthly payment on a mortgage is the mortgage payment. The amount of the mortgage payment depends on the amount of the mortgage, the interest rate on the loan, and the term of the loan. This payment is calculated by using the Payment Formula for an APR Loan given in the last section.

    5. Consumer Loans Payment Calculating Monthly Payments for APR Loan

    6. Example Calculate a Mortgage Payments Suppose Allison Sommerset purchases a condominium and secures a loan of $134,000 for 30 years at an annual interest rate of 6.5%. a. Find the monthly mortgage payment. b. What is the total of the payments over the life of the loan? c. Find the amount of interest paid on the loan over the 30 years.

    7. Check your progress Suppose Antonio ScarIetti purchases a home and secures a loan of $123,000 for 25 years at an annual interest rate of 7%. a. Find the monthly mortgage payment. b. What is the total of the payments over the life of the loan? c. Find the amount of interest paid on the loan over the 25 years.

    8. Example You purchase a condominium for $98,750 and obtain a 30-year, fixed rate mortgage at 7.25%. After paying a down payment of 20%, how much of the second payment is interest and how much is applied toward the principal?

    9. APR Loan Payoff Formula Consumer Loans: APR loan Payoff

    10. Mortgage Payoff Example: A homeowner has a monthly mortgage payment of $645.32 on a 30-year loan at an annual interest rate of 7.2%. After making payments for 5 years, the homeowner decides to sell the house. What is the payoff for the mortgage?

    11. Ongoing Expenses Example 5: A homeowner has a monthly mortgage payment of $834.57 and an annual property tax bill of $1,536. The annual cost of home insurance is $960. Find the total monthly payment for the mortgage, property tax, and home insurance.

More Related