10-2 special savings accounts - lancaster central school ：10-2专用存款账户-兰开斯特中心学校

Chapter 6 Owning a Home or Car,Chapter 6 (Owning a Home),6-1 Home buying (usually)requires:Down payment usually a given % amount of cash.this shows the bank you really want this house and are willing to pay for it.(Usually represented as a %),The balance of the purchase price (after the down payment) is usually borrowed through a mortgage loan taken with a bank or other lender.To calculate loan amount: Purchase PriceDown PaymentMortgage Loan/Borrowed Amt,To calculate loan amount: Purchase PriceDown PaymentMortgage Loan/Borrowed Amt,Ex: House costs $60,000, bank requires 10% down, what is the loan amount?Purchase Price = $60,000Down payment = - $6,000 ($60,000 * 10%)Loan Amount = $54,000,Example,Dorris wants to purchase a mobile home for $56,000. Her bank requires a 15% down payment. What amount of money does she have to have for a down payment AND how much will her loan amount be for?$8,400.00 AND $47,600,When you finish the last page of a book, what do you usually do?The actual transaction to purchase a house is called a Closinghowever,There are other costs involved than just paying the down payment and getting the loan for the balance.,These are called closing costs.Please look at the situational questions in your folders on your tables.,Situational Cards:,Who will ensure the contract is correct?,Who/what will ensure a long lost relative wont claim the house is theirs?,Who/what will ensure your property is exactly 2 acres?,Who/what will guarantee the cellar walls wont leak?,Who/what will charge to “put your paperwork” through and/or keep a record of your transaction?,Legal Fees,Property survey,Title Insurance,Inspection Fees,Recording/Processing Fees,Still need closing costs defined better?Closing Costs & Title Videos:http:/youtu.be/UgFQtmAHsbw (4:08),Closing Costs :these are fees and expenses paid to complete the transfer of ownership of a home. Closing costs range from 3% to 6% of the purchase price of the home and include: legal feestitle insuranceappraisal feesinspection feesland surveys, etc.,Closing costs can be listed individually OR it can be estimated as a percentage.,Where do closing costs come in?When you need to calculate how much cash you must bring with you to the “closing”To calculate cash needed to buy a home: Down Payment + Closing Costs Cash Needed to Buy a Home,At this “closing” is when you sign the bank papers for the loan.,Look try these examples:Hilda is buying a home for $74,000. She will make a 20% down payment and estimates closing costs as:,What amount of money will she need to borrow for her mortgage loan?$74,000 * .20= $14,800$74,000-$14,800 = $59,200,Look try these examples:Hilda is buying a home for $74,000. She will make a 20% down payment and estimates closing costs as:Legal fees $950Title insurance $140Property survey $250Inspection$175Loan processing fee$ 84Recording fee $740,What amount of cash will she need when she buys the house?$14,800 (down payment) +$2,339 (closing costs) = $17,139.00,Ricky Alberts lender requires him to make a 25% down payment to get a mortgage on a home that costs $86,000. What amount will Ricky have to borrow to purchase the home? $86,000 *.25 = $21,500 down payment$86,000 - $21,500 = $64,500 Loan AmountIf closing costs are 4% of the purchase price what is the total closing costs? $86,000 *.04 = $3,440 = closing costsHow much money does Rick need to bring to close the transaction?$24,940($21,500 + $3,440),Terri Wilburn will be able to purchase a condominium by making a 5% down payment on its $64,000 purchase price. She estimates her closing costs to be 3.5% of the purchase price. What amount of money will Terri need to pay the down payment and closing costs?$64,000 * 5% = $3,200$64,000 * 3.5% = $2,240$6,425 + $2,240 = $5,440,Why do you think a bank would required a larger % for down payment OR a higher interest rate?,Looking at the closing costs, what would make a closing costs increase?,Workbookpage 71 #1-4,Can you explain?,How do you calculate a loan amount with a down payment?What kind of items are included in closing costs?How do you calculate how much cash you need to bring with you to “close” on a house.,Mortgage Rates:1. Fixed Rate Mortgage your interest rate stays the same over the time period of the loan.2. Variable/Adjustable Rate Mortgages interest rates can change during the time period of the loan.* Usually the initial interest rate is lower than fixed, however, the lender is allowed to increase or decrease the rate at specified intervals.,Amortization TablesMost mortgages are repaid gradually, or amortized, over the life of the mortgage in equal monthly payments. Each payment pays off part of the principal plus the interest due each month.Look at the top of page 211.note how little principal is paid in the first few months compared to the last few.,ExamplesUsing the table on page 211, what is my monthly payment for a $45,000 mortgage taken out for 30 years at 6% interest?$ 269.80how many times(months) did you make this payment?12 * 30 = 360How much did you pay for this $45,000 loan at the end of the term?269.80 * 360 = $97,128.00,Examples.Page 212C and D$620.24; $68,857.60$257.72; $37,316,Refinancing a Mortgage when you take out a new mortgage and use that money to pay off the old mortgage. You must also pay new closing costs that are incurred.Look at page 213 Example$748$71,Homework:Page 71-72 - all questions(this will be graded on Monday),6-2 Renting or Owning a Home,Cost of OwnershipOwning a home comes with expenses:Property taxesRepairsMaintenanceUtilitiesInsuranceTrash pick upetc,Two less obvious expenses:,DepreciationLoss of Income on the money invested in the home.,Depreciation,The loss of value of property caused by aging and use.ex: roof, heating costs, not updatingMost housing depreciates slowly at about 1% to 4% of its original value per year.Amount of depreciation cant be calculated until a house is sold,Loss of Income on the money invested in the home.,Occurs because the money initially invested in buying the property (down payment and closing costs) could have been deposited in a savings account and earned interest.Then why own? people can include the interest they pay on their home mortgage and property taxes they pay on their tax return.this reduces taxable incomeyou pay less taxes and have equity in a house.,Equity,The difference between what is owed on a home and its value.,$5,244mortgage interest$2,350property taxes$360Insurance$1,240depreciation$1,710 utilities$1,535maintenance, repairs$1,270 loss interest,$13,709 total expenses$1,428 tax reductions$12,281 net cost for the first year,Look at page 217Example 1,Look at page 218Example 1$16,572.00$12,629.00Now do page 71 in your workbook.,Costs of Property Rental,Some people cant afford to buy or dont want the hassle of maintenanceso they rentRenters:Usually pay a one time security deposit in addition to their first months rentthis covers any damage done while living thereif there is no damage, the money is returned.Sign a lease or rental agreement that they will be there for a stated period of time.,Look at page 218Letters C and D$16,572.00$12,629.00Now do page 71 in your workbook.,Homework:Page 73 in your workbook,Compare Renting and Owning Homes,When you rent, you consider the monthly rent as an expense, however when you pay your mortgage, that is not considered an expense, but the interest, utilities and everything else is.,6-3 Property Taxes,Property taxes taxes on the value of real estate such as homes, business property, or farm land. Usually collected annually or semiannually by the tax department of the town or city you live in.,Services paid for by taxes:,SchoolsGovernment operationsFire protectionPolice protectionParksRoad maintenance,What does the word assessed mean?,Taxes are paid based on the assessed value,An assessed value is usually calculated by local tax assessors and is usually a percentage of the actual value of your houseEx:Bill Watsons home is valued at $150,000.00. It is assessed at 40% of its market value or $60,000.00.Taxes are then calculated on the assessed value of $60,000.00,Local tax districts determine the tax rate needed to pay for the services they provide.They estimate their expenses for the coming year and prepare an expense budget. They also estimate income from sources other than property tax, such as licenses, fee, fines, rents, state aid and so on.The difference between the total budget and the income from other sources is the amount that must be raised by the property tax.,Local tax districts then determine the decimal tax rate, which is the tax rate at which property is to be taxed. Decimal tax rate = amount to be raised by property taxTotal assessed valueExample 1 from page 224:$6,000,000 - $1,800,000 = $4,200,000(property tax needed) $39,999,000 = .107692,Tax rates per $100 or $1,000,To find the tax due on property when the rate is in $100 or $1,000, first find the number of $100 units or $1,000 units in the assessed value. Then , multiply the numbers of units by the tax rate to find the tax due.Read Example 2 on page 225,Look at page 225Example 1$1,569.12$4,953.60Page 226$3,380.40$348.71,Homework:Page 75 &76 in your workbook due Tuesday,6-3 Property Insurance,Homeowners insurance covers your home and protects you against other risks.Dwelling the home in which you liveOther structures garagePersonal property contents of home,Additional living expense pays for the extra cost when you can live at homePersonal liability protects you against lawsuits by person injured on your propertyMedical payments to others,Replacement costs policies pays to replace at current valuePremiums the money paid to an insurance companythis is your bill.Renters Insurance same coverage as a home, but if you rent.Deductible the amount you pay before your insurance company pays.,Homework,Page 77-78 #1-9,6-5 Buying a Car,MSRP Manufacturers Suggested Retail Price.also known as sticker priceCar buyers usually do not pay this pricethey negotiate a price to pay based on trade in, rebates, and loan options.,Purchase Price refers to the price negotiated by the dealer and the buyer. This price includes the car and any options installed by the dealerDelivered Price also called “out the door” pricethis includes purchase price, sales tax, registration fees less the rebate.Balance Due what the customer has to pay for their car.less discounts, rebates, down payments or trade-ins.,Words to know,Base price price for a model with just the standard features.Warranty this comes on all new cars and usually covers things that break 36 months or 36,000 milesthis doesnt include maintenance.Extended warranty provides extra coverage for a number of months and mile,Purchase PriceSales TaxRegistration FeesNon-taxable items,RebatesDelivered PriceDown PaymentBalance Due,Look at page 241Letters C and D$21,354.87 $15,354.87$17,398.28 $15,774.48 workbook.,6-6 Car Purchases and Leases,The delivered price of a car purchase may be paid in cash, however, most people make a down payment and take out installment loans.,6-6 Car Purchases and Leases,The delivered price of Sues car is $23,560. She makes a $2,000 down payment and pays the balance in 48 monthly payments of $560. What total amount did Sue pay for the car, AND what was the finance charge?1. $2,000 + $26,880 (560 x 48) = $28,880.paid for2. $28,880 - $23,560 = $5,320finance charge,Lets SolveSteve Rubin bought a used truck for $9,650. He paid for the truck with a $2,650 down payment and 36 monthly payments of $234.30. What total amount did the truck cost?$11,084.80,Lets SolveAngie bought a luxury car for $47,851 and made a $4,500 down payment. She got a special loan rate of 2.1% for 60 months. Her monthly payments were $761.74. What was her finance charge on this car?$2,353.40,Cost of Leasing,A lease is a contract between the car company and the customer. Similar to renting a car for a long period of time.Conditions:Return in good conditionUsually within a stated # of milesPayment and time frame is agreed toRequired down paymentYou must still pay for registration and processing fees.You usually have the option of buying the car at the end of the lease period. (Residual Value),Compare Leasing and Buying,When comparing the two, you must add the residual value to the cost of leasing since you assume you will buy at the end.,Wilbur and his dealer negotiated a price of $27,400 for a new car. He can lease the car for $496 for 36 months and buy it at the end of the lease for its residual value of $16,200. If he buys the car now his month loan payment will be $822 for three years after making a $2,000 down payment . What is the total cost of purchasing the car under each plan? Which is less expensive?Lease: 36 x $496 = $17,856 $17,856 + $16,200 = $34,056.cost of leasingBuy: 36 x $822 = $29,592$29,592 + $2,000 = $31,592cost of buying Difference .34,056 31,592 = 2,464*Buying is less expensive!,HomeworkWorkbook Page 81,6-7 Depreciating a Car,A car loses value as it grows olderthe loss of value is called deprecation. The total depreciation on a car is the difference between its original cost and its resale, or trade-in value.Depreciation = Original Cost Trade-in or Resale Value,6-7 Depreciating a Car,When you buy a car, you can only estimate what the depreciation will be. The actual amount of depreciation will be known only when the car is sold or traded in.,6-8 Cost of Owning a Car,Car Insurance:There are 4 basic types of insurance or coverage for motor vehicles that protect you against the risk of financial loss:,6-8 Cost of Owning a Car,Bodily Injury covers your liability for injury to others.Property damage covers damage to other peoples property including their vehicles.Collision covers damage to your own motor vehicle.Comprehensive damage covers damage or loss to your vehicle from fire, theft, vandalism, hail, and other causes.,6-8 Cost of Owning a Car,Read page 256 in your textbookPage 257 $664.85 $1,064.50,Costs of Operating CarsThe total operating cost for a car is the sum of all the annual expenses of using the car. These expenses include:,InsuranceGasOilLicenseInspection feesTires,RepairsGarage rentParking feesTaxesDepreciationInterest lost on down payment,6-8 Costs of Operating a Car,Page 257 $4,705.00 $ 2,158.00,Workbook Page 83 and 84Please get this out.,Page 83 Answers,Page 84 answers $1,422.90 $1,160.56$262.34 saved $1,006.97 $907.18 $1,032.32$154.85$877