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Chapter 13

# Chapter 13 - So you want to buy your dream home Can you...

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© Chris Robinson and Captus Press Inc., 2006 © Chris Robinson and Captus Press Inc., 2006 So you want to buy your dream home? Can you afford it? How?

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© Chris Robinson and Captus Press Inc., 2006 Learning Objectives Learning Objectives Understand mortgage financing math How expensive a house can you buy? Understand home ownership as an investment. Basic method of valuing a house. Rent vs. buy decision
© Chris Robinson and Captus Press Inc., 2006 Mortgage Financing Mortgage Financing We did most of this early in the course. Example from text: Mortgage \$100,000. 25 years amortization. Interest rate 7%. What is the monthly payment? I (1 + .035) 1/6 – 1 = .5750% PV 100,000 N 25 X 12 = 300 PMT \$700.41

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© Chris Robinson and Captus Press Inc., 2006 How Much Home Can You Afford? How Much Home Can You Afford? GDS ≤ 30%; TDS ≤ 40% Equity must be 25% of value in standard mortgage. High risk mortgage with less than 25% equity, even zero –
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Chapter 13 - So you want to buy your dream home Can you...

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