Thursday, May 1, 2008
Real Estate & Mortgages Discussion Questions & Case Sudies Due 05-01-2008
Type the Discussion Questions on page 112 of your Financial Peace Workbook and answer them in a complete sentence. Also, type the Case Studies on page 112 of your Financial Peace Workbook and answer them in a complete sentence.
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11 comments:
Discussion
1. Explain ways you could save up enough to buy your home with cash.
-Rent out a cheap apartment. Sve up your money to buy a house.
2. Why would you want to keep your house payment less than 25% of your monthly take-home pay?
-So you could save up for your bills and other stuff. Aso, you could save for a new house.
3. What are the advantages of having a fully funded emergency fund before you buy a home?
-If an emergency pops up, you will have the money to pay for it.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon?
-Because they want to feel like their own person.
5. Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same loan amount?
-It is spread over a longer time.
Case Studies
1. Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put down 5% down. With the VA loan, they can move in with a zero-down purchase. They have enough money to pay the down payment on the conventional, but they want to have some money to buy furnishings and other items they may need. Derrick is a veteran, so the VA looks very attractive. What would you suggest for them?
-I would tell them to go with the conventional loan. It is not as expensive as the VA loan.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do?
-I would advise them to stay in the house they are currently in and save up for their next house that they buy.
Discussion
1. Explain ways you could save up enough to buy your homewith cash.
-Just stay in a cheap apartment and save up money to pay for it at oen time.
2. Why would you want to keep your house paymetn less than 25% of your monthly take-home pay?
-So that you will still have money left for you bills.
3. What are the advantages of haveing a fully funded emergency fund before you buy a home?
-In case you have to make any emergency funds..
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying tosoon.
- Because they are ready to get theri first house. If you cna't pay it in full then it is too early.
5. Why would a 30-year mortgage have a higher interest rate than a 15-yeart mortgage on the same loan amount?
-The interest builds up.
Case Studies
1. Justyna adn Derrick are engaged to be married in three months. They have foudn a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have 5%down. With the VA loan, they can move in with a zero-down purchase. They have enough monehy to pay the down paymetn on the conventional, but they watn to have some money to buy furnishing s and other items they may need. Derrick is a veteran, so the Valooks very atrtractive. What would you suggest for them?
-I would suggest that they keep saving till they get enough money to pay for atleast 25% fo the house.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house rthat they want to buy, but they will barley be able tomake the payments on a fixed interest rate. With ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that tiemt hey figure pay extra whenever bonuses come in. They are tired or fentign and love thsi house. What would you advise Jerry and Pan to do?
-To wait and get the bonuses adn save up some money and the n go get it. And make sure they get it on a 15year mortgage adn not a30.
Discussion
1. Explain ways you could save up enough to buy your home with cash.
- You can rent and keep savings.
2. Why would you want to keep your house payment less than 25% of your monthly take-home pay?
- If you kept it any higher, you would be falling under and barely scraping by.
3. What are the advantages of having a fully funded emergency fund before you buy a home?
- Problems happen and as soon as you buy a house, you barely have any money to start out.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon?
- They see others doing it and feel they need a house to separate themselves as an adult.
5. Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same loan amount?
- Interest is higher.
Case Studies
1. Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put down 5% down. With the VA loan, they can move in with a zero-down purchase. They have enough money to pay the down payment on the conventional, but they want to have some money to buy furnishings and other items they may need. Derrick is a veteran, so the VA looks very attractive. What would you suggest for them?
- Use the conventional, you always buy furnishings later. There is no need for debt.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do?
- Save and wait. They could come upon a better deal.
Type the Discussion Questions on page 112 of your Financial Peace Workbook and answer them in a complete sentence. Also, type the Case Studies on page 112 of your Financial Peace Workbook and answer them in a complete sentence.
1. explain ways you could save up enough to buy your home with cash. Cut back on buying things. Don’t make any impulse purchases.
2. Why would you want to keep your house payment less than 25% of your monthly take-home pay? Because you need food, clothing, and emergencies.
3. What are the advantages of having a fully funded emergency fund before you buy a home? You could pay a higher house payment.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon? They want out of a small house. To make sure they have enough money.
5. Why would a 30-year mortgage have a higher interest rate then a 15-year mortgage on the same loan? It would be less likely to be paid.
1. Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put 5% down. With the VA loan, they can move in with a zero down purchase. They have enough money to buy furnishings and other items they may need. Derrick is a veteran, so the VA looks attractive. What would you suggest for them? I would tell them to do the VA loan.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM they are sure they can make the payments. By the time the figure they may change the fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do? Not to take out a 30-year mortgage, but to wait and see what happens. Try to buy the house but be sure to make the payments and a little more before buying.
1. Explain ways you could save up enough to buy your home with cash.
-Don’t spend your money of stuff you don’t really need.
2. Why would you want to keep your house payment less than 25% of your monthly take-home pay?
-Because there are other things you have to pay for.
3. What are the advantages of having a fully funded emergency fund before you buy a home?
-You wont have to worry about that in the future.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon?
-So they wont spend it all on other stuff. Go ahead and buy the house.
5. Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same load amount?
–It will probably not be paid.
1. Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put 5% down. With the VA loan, they can move in with a zero-down purchase. They have enough money to pay the down payment on the conventional, but they want to have some money to buy furnishings and other items that they may need. Derrick is a veteran, so the VA looks very attractive. What would you suggest for them?
-Tell them to do that VA loan thing.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do?
-Go with the ARM loan so they are sure they can pay it all off.
Discussion
1. Explain ways you could save up enough to buy your home with cash/
-Try not to spend money on useless things like clothes and jewelry and stuff.
2. Why would you want to keep your house payment less than 25% of your monthly take-home pay?
-So you won’t have to spend most of the money you make on your home.
3. What re the advantages of having a fully funded emergency fund before you buy a home?
-If anything happens to anyone in your family you could use that fund to help pay for medical bills.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon?
- If you buy too soon you have 2 house payments you have to pay for.
5. Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same loan amount?
-A 30-year mortgage has more years on it than a 15-year mortgage.
Case Studies
1. Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put 5% down. With the VA loan, they can move in with a zero-down purchase, Thy have enough to pay the down payment on the conventional, but they want to have some money to buy furnishings and other items they may need. Derrick is a veteran, so the VA looks very attractive. What would you suggest for them?
-I would tell them to get the VA loan and use that other money to get stuff for their home.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but they will barley be able to make the payment on the fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have a pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pan to do?
- I thing they should go ahead and do the ARM, because it is better for the interest rate and for them also.
DISCUSSION
1.Explain ways you could save up enough maney to buy your home with.
-rent and apartment and save 30k a year for 5 years. then you will have 150k and you can buy a home.
2.Why would you want to keep your house payment less htan 25% of you monthly take home pay?
-So you dont go broke im guessing.
3.What are the advantages of having a full funded emergency fund before you buy a home?
-if somting happens to your home when you move in you will not have to struggle to get the money to replace or fix it. you will allready have the money.
4.Why do people want to get a home as quickly as possible and what are some ways to avoid buying to soon?
-Because they do not feel complete unless they have a home.
5.Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same loan amount.
-Because it takes longer to pay a 30-year loan back and they will be making more money.
CASE STUDIES
1.Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. with the conventional they have to put 5% down. With the VA they can move in with a zero down purchase.They have enough money to pay the down payment on conventional, but they want to have oney to buy furnishings and other items they may need. Derrick is a veteran so the VA looks verry attractive. What would you suggest for them?
-I would choose the VA plan. Then use the extra money i would have to put down for furniture and other things.
2.Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but the will barely be able to make the payments on a fixed interset rate. With the ARM, they are sure they can make the payments.By the time the rates increase they are expecting to have increases at their work. At they time they may consider changing a fixed interest rate.They are going to go with a 30-year mortgage and they will pay extra when bonuses come in. they are tired of renting and love this house. Whata would you advise jerry and pam to do?
-Wait untill they have enough money to afford the home and the ywill not struggle withh bills and such. I would tell htem to make some sacrifices.
Type the Discussion Questions on page 112 of your Financial Peace Workbook and answer them in a complete sentence. Also, type the Case Studies on page 112 of your Financial Peace Workbook and answer them in a complete sentence.
1. Explain ways you could save up enough to buy your home with cash. The only way I know of is to get a savings account.
2. Why would you want to keep you house payment less than 25% of your monthly take-home pay? So you can use the rest of your own money.
3. What are the advantages of having a fully funded emergency fund before you buy a home? You can use your emergency fund to buy it.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon? So they can get out of their house, and look for a long time.
5. Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same loan amount? It lasts longer.
Justyna and Derrik are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put 5% down. With a VA loan, they can move in with a zero-down purchase. They have enough money to pay the down payment on the conventional but the want to have some money to buy furnishings and other items they may need. Derrik is a veteran, so the VA looks very attractive. What would you suggest for them? I would tell them to get the VA loan so they will have some money to get the extra stuff that they need.
Jerry and Pam are looking into an ARM as a financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do? I would tell them to get the ARM and buy the house.
1. Explain ways you could save up enough to buy your home with cash.
-rent a cheap apartment or stay home with mom or dad and save enough money to buy a house.
2. Why would you want to keep your house payments less than 25% of your monthly take-home pay?
-so you could save some your money for bills. keeps the bills evened out.
3. What are the advantages of having a fully funded emergency fund before you buy a home?
-well if an emergency pops up have money stored away to pay for it.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buyng too soon?
-because most of the time people are ready to get out of the house. you need to be patient.
5. Why would a 30-year mortgage have ahigher interest rate than a 15-year mortgage on the same loan amount?
-because 30 is longer than 15
1. Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put down 5% down. With the VA loan, they can move in with a zero-down purchase. They have enough money to pay the down payment on the conventional, but they want to have some money to buy furnishings and other items they may need. Derrick is a veteran, so the VA looks very attractive. What would you suggest for them?
-i would suggest the VA if that were possible.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do?
i would suggest not to go with the 30-year mortgage and found a house that they can pay for.
Discussion
1. Explain ways you could save up enough to buy your home with cash.
Rent out a cheap house or apartment for a while. Your money that you save will eventually build up then.
2. Why would you want to keep your house payment less than 25% of your monthly take-home pay?
So you could save up for your bills and other stuff that you wanted. Also, you could save up your money for that new house you have been wanting.
3. What are the advantages of having a fully funded emergency fund before you buy a home?
If an emergency pops up, you will have the money to pay for it. You have to keep money aside for it though.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon?
Because they want to feel like their own person and do there on thing.
5. Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same loan amount?
It is spread over a longer period of time. It would be a easier buy and pay.
Case Studies
1. Justine and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put down 5% down. With the VA loan, they can move in with a zero-down purchase. They have enough money to pay the down payment on the conventional, but they want to have some money to buy furnishings and other items they may need. Derrick is a veteran, so the VA looks very attractive. What would you suggest for them?
I would tell them to go with the conventional loan. It is not as expensive as the va loan. It would be the best way to go.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do?
I would advise them to stay in the house they are currently in and save up for their next house that they buy. Do not get to antsy and make an impulse purchase.
1. Explain ways you could save up enough to buy your home with cash.
Start saving when you are young and put the money in a mutual fund.
2. Why would you want to keep your house payment less than 25% of your monthly take-home pay?
Because the rest of the money would go to all the other expenses you have to pay for.
3. What are the advantages of having a fully funded emergency fund before you buy a home?
So you will be able to pay for emergencies and not take out money from your house payment.
4. Why do people want to get into a home as quickly as possible and what are some ways to avoid buying too soon?
Think about the purchase more, look at more houses, and consider all of your options.
5. Why would a 30-year mortgage have a higher interest rate than a 15-year mortgage on the same loan amount?
No but over the long time you would paying a lot more money.
Case Studies
1. Justyna and Derrick are engaged to be married in three months. They have found a home they wish to purchase. They have the option to get a conventional or a VA loan. With the conventional loan, they will have to put down 5% down. With the VA loan, they can move in with a zero-down purchase. They have enough money to pay the down payment on the conventional, but they want to have some money to buy furnishings and other items they may need. Derrick is a veteran, so the VA looks very attractive. What would you suggest for them?
Getting a conventional because they will be able to pay it off faster and the interest rates will not be as high.
2. Jerry and Pam are looking into an Adjustable Rate Mortgage as a financing option. They have found a house that they want to buy, but they will barely be able to make the payments on a fixed interest rate. With the ARM, they are sure they can make the payments. By the time the rates increase, they are expecting to have pay increases at their work. At that time they figure they may change to a fixed rate. They are going to go with a 30-year mortgage, and they will pay extra whenever bonuses come in. They are tired of renting and love this house. What would you advise Jerry and Pam to do?
Get a smaller home with a fixed rate that they can afford.
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