Personal Personal FinanceFinance

Housing

Housing ChoicesAlternatives• Decision-making model

Housing ChoicesAlternatives

• Stay at home

What do you think?Discussion

• What are the advantages of leaving home to live on your own?

• What are the disadvantages of leaving home to live on your own?

Housing ChoicesAlternatives

• Live in a dorm (college)

Housing ChoicesAlternatives

• Move on – estimate cost

Housing ChoicesTypes of Housing

• Single familyOne family dwelling in

which you do not have

other dwellings

connected to yours.

Housing ChoicesTypes of Housing

• Multifamily–Condominium

You actually own your part

Of the complex but pay

monthly fees for the upkeep

of the grounds.

Housing ChoicesTypes of Housing

• Multifamily–Apartment building

You do not own your

dwelling. You are not

responsible for the

upkeep of the plumbing,

heating etc….

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Housing ChoicesTypes of Housing

• Multifamily– Townhouse:multi leveled unit(has an upstairs and

down stairs.

– Duplex two dwellings that are connected. One family lives on one side and another family lives on the other side. There is a wall in between the 2 sides.

Housing ChoicesTypes of Housing

• Multifamily– Manufactured home these are built at a factory and moved

to the location that the family will be living

• Modular

• Mobile

What is a housing arrangement in which you own the apartment or home, but not the common grounds?

A. A single-family dwelling

B. A multifamily complex

C. A condominium

D. A modular home

E. A dormitory

What is a housing arrangement in which you own the apartment or home, but not the common grounds?

A. A single-family dwelling

B. A multi-family complex

C. A condominium

D. A modular home

E. A dormitory

Housing ChoicesRenting

• Advantages of renting–Flexibility to move quickly

–No down payment ($)

–Lack of responsibility• No maintenance–Grounds / driveway

– Interior plumbing, etc.

• Do not own home

Housing ChoicesRenting

• Disadvantages of renting–Can’t change structure

–Possibility of poorlandlord service

–Less privacy

–No equity

Housing ChoicesRenting

• Roommate?–Advantages• Share rent• Enjoy friendship• Share responsibilities

–Disadvantages• Live with an opposite (clean vs. messy, etc.)• Lack space• Be left holding the bag (financially)

Housing ChoicesRenting

• Roommate–Finding one• College swap board

• Friends

• Friends of friends

• Newspaper

What do you think?Discussion

• What would you like about having a roommate?

• What might you dislike about having a roommate?

Housing ChoicesRenting

• Cost of renting–Security deposit

–First and last months’ rent

–Moving

– Insurance (renters’)

Housing ChoicesRenting

• Legal concerns–Lease

–Care of premises

–Legal rights

–Fair Housing Act

Housing ChoicesRenting

• Housing subsidies

Which of the following is not a cost of renting an apartment?

A. Security deposit

B. First month’s rent

C. Insurance

D. Moving expenses

E. Mortgage

Which of the following is not a cost of renting an apartment?

A. Security deposit

B. First month’s rent

C. Insurance

D. Moving expenses

E. Mortgage

Housing ChoicesBuying a Home

• Advantages–Freedom to change

structure

–Privacy

–Equity

–Taxdeductions

Housing ChoicesBuying a Home

• Disadvantages –Selling house–Decline in value–Maintenance–Down payment

(10–30%)–Property tax

What do you think?Discussion

© EMC Publishing, LLC

• What would you say is the biggest advantage of owning a home?

• What is the biggest disadvantage?

• Do you think everyone wants to buy a home? Why or why not?

Housing ChoicesBuying a Home• Obtaining financing –Mortgage• Fixed rate and adjustable rate

–Preapproval–Loan application fees–Points–Government financing• FHA and VA

–Types of mortgages

Housing ChoicesBuying a Home

• Securing a loan–Collateral / lien

–Foreclosure

Housing ChoicesBuying a Home

• Real estate agent – no cost to the buyer

• Location, location, location

• Offer

• Counteroffer

• Purchase agreement

• Escrow account

Housing ChoicesBuying a Home

• Walk-through inspection–Check basement for signs of water

• Pest and other inspections

Housing ChoicesBuying a Home• Closing costs

Housing ChoicesBuying a Home

• Deed

Keep it in a safety deposit box with other valuables.

What is the amount called that you pay to obtain a low interest rate from a financial institution?

A. Down payment

B. Points

C. FHA

D. Mortgage

E. Lien

What is the amount called that you pay to obtain a low interest rate from a financial institution?

A. Down payment

B. Points

C. FHA

D. Mortgage

E. Lien