READ ALL INSTRUCTIONS BEFORE BEGINNING. --- REREAD ALL INSTRUCTIONS BEFORE TURNING IN YOUR PROJECT! General Guidelines • Where you are asked to explain, please do so in 12-point font, double-space, 1- inch margins. • ALL CONTENT IS EXPECTED TO BE PROOFREAD • You may handwrite all math calculations. If using a calculator, indicate what numbers and operations you used (i.e.: 150,000 x 20) to get your answers. If using TVM Solver, show which values you put for each variable and which variable you solved for. Clearly label all work and final answers. Instructions You're going to buy a house! Choose ONE of the following financial situations: Single Married, one dependent • Income $65,700/year • Renter at $1200/month Savings: $13,750 • Car Payments: $388/month (36 mos) Health Insurance: $700/year • School loans: $182/month (4 years) Car insurance: $205/month • Joint income: $128,900/year • Savings: $21,350 Car payments: $680/ month (12 mos) Health insurance: $1250/year School loans: $570/month (5 years) Car insurance: $305/month Best Buy appliances: $235/month (2 years) • SECTION #4 - L For each lo SECTION #1 - Pick one scenario. Calculate how much house use the varia - you can afford. ге Show all work for your calculations, and clearly mark your maximum monthly payment using the 28% Rule. You may hand write your calculations - do not type them! SECTION #2 - Find a house you can afford! Search for a home using online real estate websites such as Zillow.com, Redfin.com, or Trulia.com. You can choose any house anywhere in the U.S. You will need a listing that also lists current property taxes and possible Home Owners Association fees (if looking at a townhouse or condominium.) - If the listing does not include taxes, you can find Cook County tax information at http://www.cookcountypropertyinfo.com by entering the address. - Assume you will need to put down 20% of the purchase, and that the purchase price listed is non-negotiable. 1. Print the listing, including all relevant room and neighborhood descriptions, tax information, sales info, etc. 2. Include the exact link to this listing on your “Sources” page 3. Print out separate property tax information, if used. 4. Calculate homeowner's insurance, using this formula from SFGate: "For most homeowners, the annual costs for a homeowners insurance policy can be estimated by dividing the value of the home by 1,000, then multiplying the result by $3.50. 38900px 3.50 x 1200 5. On a separate page, explain why you chose this house and neighborhood (1-2 pages). > SECTION #3 - Locate three different loan options You will use the Bankrate.com website for this section: http://bit.ly/2rNjtcD Select three different loans from the listed options. They must have one significant difference. Loan length, down payment amount, and/or points paid are the different variables you can choose. Assume you have a 740+ credit rating. If you use a different rating, please indicate that. Choose “All Points” for that option to get a larger range of options. PRINT THE PAGE from the website, and highlight the loans you chose to compare. uch house bly type SECTION #4 - Loan Calculations For each loan, show the following, including all work for the calculations. (If you use the TVM Solver on your calculator, show the values you enter for each variable.) You may hand write all calculations, but clearly label the work and final results for each loan: - Your down payment amount - Your mortgage amount - The cost of points - Monthly interest and principal payments - Monthly taxes (base on most recent tax information from Section #2) Monthly insurance payment (based on #2) - Monthly PMI payment, if applicable - Total monthly cost of the loan - TOTAL COST OF THE LOAN Down payment, points, fees, principal and interest (Do not include insurance or taxes) - How much of the total cost is interest? Which loan do you choose? SECTION #5 - Reflection In 2-3 typed pages, explain how this assignment went for you and what you learned from completing this assignment. How was the process of finding an affordable house? Was there anything that surprised you? Do you feel more knowledgeable about mortgages? What will you do differently to prepare when it's time for you to purchase a house? SECTION #6 - Assemble the project Your project must be assembled in the following order. The project must be stapled. The entire project must be proofread. 1. Cover sheet with a title, your name, and the class section 2. Adjusted monthly income calculation, with maximum monthly payment 3. Property listing printout, including tax and insurance information, and narrative for why you chose this house 4. Bankrate.com loan option print-out with chosen loans highlighted. 5. Loan calculations page(s) 6. Reflection 7. Sources page – a web link for each printout. Links must lead directly to the page, not to the general website. GRADING 100 possible points Each section graded for completeness and correctness Points 10 20 5 Section 1: How Much House? Calculations complete and correct Section 2: Find a House All printouts for house, tax, and insurance Sources listed Reflection on why chosen Section 3: Three Different Loan Options Printed and chosen loans highlighted, all different Section 4: Loan Calculations Complete and correct for each loan, clearly labeled, work shown, chosen loan indicated Section 5: Reflection Evidence of thought and time, proofread Section 6: Neatness and Completeness Sources complete and lead to pages, cover sheet, project stapled, in correct order 30 20 15
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