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Housing Decisions and Financial Considerations

Learn about the opportunity costs of housing choices, rent vs. buy decision factors, advantages and disadvantages of apartment renting and home ownership, financial commitments, lease negotiations, rental search tips, and more. Explore costs, locations, layouts, and facilities that impact housing choices.

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Housing Decisions and Financial Considerations

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  1. The Finances of Housing Chapter 9

  2. Chapters 9.1-9.2

  3. Opportunity Costs of Housing Choices • ‘Trade-Offs’ • Interest • Lost with a down payment/security deposit • Commuting • Driving to work daily • Time vs Cost • Time & Money • Lower/older priced homes

  4. BRAINSTORM • Respond in your notes • Textbook page 274 • Figure 1 Question

  5. Renting vs Buying • Housing Source Information • Libraries • Newspapers • Real Estate Agents • Government Agencies

  6. BRAINSTORM • What decisions about housing will be determined by your personal lifestyle? • As of right now, what is important for you to have in your first place? • Record answers in your notes

  7. Renting an ApartmentAdvantages • Mobility • Low maintenance • Low financial comitment

  8. Renting an ApartmentDisadvantages • No tax advantages • Less pricy

  9. Figure 4: A Typical Lease Agreement • Textbook pg 281 • Respond in your notes: • Which parts of a lease are most likely to be negotiable?

  10. Figure 5: Finding and Living in Rental Housing • Textbook pg 282 • Respond in your notes: • How does the lease protect the tenant and the landlord?

  11. Homework • Complete the following end of the section assessments: • Page 276 # 1-4, 6 • Page 283 # 1-4, 6

  12. Chapter 9.3

  13. Owning a HomeAdvantages • Pride of ownership • Plenty of space • Tax benefits

  14. Owning a Home Disadvantages • Financial commitment • High living expense • Limited mobility

  15. BRAINSTORM • How would you begin an apartment search? • Which features would be most important to you? • Location • Size/Cost • Building Amenities • Layout

  16. Features • Size vs Cost • Tenant • Pays for the right to live in your rental • Owned by someone else • Landlord • Owns the property that is being rented • Complex

  17. Location • What are some areas/places people want to live near?

  18. Finances • What are some costs to consider when selecting a rental unit?

  19. Building • What are some factors about the building/complex that are important to consider?

  20. Layout & Facilities • How does the layout of the apartment/complex and the facilities it offers play a role in renting a unit? • What do you believe people are looking for?

  21. DECODING THE MESSAGE • Read the listing for an apartment that is in your notes. Can you decipher what they are advertising for rent?

  22. Advantages of Renting • Greater mobility • Few Responsibilities • Lower Initial Cost

  23. Disadvantages of Renting • Financial and Lifestyle Restrictions • Legal Issues

  24. BRAINSTORM • How does the lease protect the tenant and the landlord? • Record thoughts in your notes

  25. The Cost of Renting • Factors that determine cost: • Location • Living Space • Utilities • Security Deposits • Renters Insurance

  26. Guided Practice • Renting vs Buying Worksheet • Examining • Lease Agreement • Rental Agreement • What's the difference? • Be prepared to discuss your thoughts

  27. Buying a Home: Affordability and Your Needs • Price and Down Payment • Size and Quality • ‘Trading Up’ • Location

  28. 5 Steps in Buying a Home • Determine your ownership needs • Find and evaluate a property • Price the property • Obtain financing • Close • Insurance • Home inspection • Appraisal • Credit report • Land transfer tax • Interest paid in advance?

  29. Document Detectives • Mortgage amount is determined by: • Income, amount available for down payment, current market rates • Calculating the costs of mortgages • Page 289 • Record answers – discuss

  30. Real Estate Agent • Great source of homes = location, availability, negotiators • Sellers • Buyers

  31. Determining the Life of the Home • Topics to consider when making an offer: • Length on the market • Competition • “Seller’s Market” vs “Buyer’s Market” • Current owners • Meeting your needs • Financing • Taxes and Insurance

  32. Around the World • Italy • Page 293 • Record answers - discuss

  33. Types of Mortgages • Fixed-Rate Mortgages • Adjustable-Rate Mortgages • Government Financing Program • FHA • Home Equity Loans • Refinancing

  34. Computing Mortgage Payments Worksheet

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