What is the total

you can spend on a

home?
$242,713
Assume you need to have 20% of
that price to put don!ho
much do you need?
$4",#42$%
&losin' costs are fees you
have to pay to 'et a loan$
(hey are 2)#% of the price of
the home$ *o much do you
need?
$12,13#$%#
I live in Colorado My current career is Psychiatrist My current salary is $4,769
BUYING A HOME
There are 9 steps to buying a home. Use this packet to go through the entire process. You will
also be given another sheet with your personal financial information on it in order to help you
through the process.
Step 1: Figure out how much you can aor!"
Go to www.financialcalculators.com. ind the !ortgage "alculators section. "hoose the #ow
!uch #ome "an $ %fford& "alculator.
'croll down to the link( #ow much home can you afford. $nput the necessary numbers from
your given situation.
)ook for this in the results(

Yearly Gross Income
Set to 5
Set to !"
#eave all at "
$on%t chan&e these'
I live in Colorado My current career is Psychiatrist My current salary is $4,769
Go back to financialcalculators.com. "lick on 'hould $ *ent or +uy a #ome& calculator. $nput
your current rent. $nput the purchase price of home from the first calculator. You have a ,-.
down payment. Your loan will be for /- years at 0.. $nput the number of years you plan to stay
in home.
#ow much will you save 1or not2 by buying the home over the years you will live there&
$ would save 3456997 if $ bought a home.
Step #: $now Your %ight&"
%ll borrowers have rights when getting a home loan. You should ask 8uestions about the loan6
and reali9e that you can shop around for a home loan. :o a Google search to find the current
%;* for(
/- year fi<ed mortgage& 7.//9.
50 year fi<ed mortgage& /.,.
=hat website did you use& htt()**+++',illo+'com*mort&a&e-rates*!"-year-.i/ed*0re1uest234-
5Y#5634
Step ': Shop or a (oan
Go to www"hu!"go)*+uying" "lick on the )ooking for the best mortgage( shop6 compare6 negotiate
link. >pen the ;: and look through the materials 1and especially the glossary) to answer the 8uestions
below(
=hich type of loan is better( i<ed?rate or %d@ustable?rate loans& =hy&
i<ed?rate because the amount of money you have to pay never fluctuates and it is a set amount each
time. =hile with the ad@ustable?rate loans6 when the interest rate rises6 so does the price.
=hat is ;!$ and when is it re8uired&
$t protects the lender against a loss if a borrower defaults on the loan. $t is usually re8uired for loans in
which the down payment is less than ,- percent.
The money held in escrow is used to pay for(
$tAs used for the homeowner to pay for ta<es and insurance.
Step ,: (earn a+out Home+uying -rogram&
Bothing to do in this stepC@ust be aware that there are programs available to help those that
cannot afford a house on their own. or e<ample6 #abitat for #umanity will use volunteers to
build a house for a needy family6 if the family 8ualifies.
Step .: Shop or a Home
I live in Colorado My current career is Psychiatrist My current salary is $4,769
irst you should choose a real estate agent. %s a first time homebuyer6 you should BDED* buy without
an e<perienced agent. ;lus6 it costs you B>T#$BGF *eal Dstate agents are paid by the sellers of a
home6 and first time home buyers are not selling their homes6 so they pay nothingF
There is nothing for you to do for this step6 @ust remember this for your futureF
Be<t you make a wish list. ill in the wish list on the following , pages.
The Basics:
1$ What part of ton +or country, do you ant to live in?
2$ What price ran'e? -o less than ? .ut no more than?
3$ Are schools a factor and, if so, hat do you need to ta/e into consideration +e$'$ ant
speci0c school system, ant /ids to .e a.le to al/ to school, etc,?
4$ 1o you ant an older home or neer home +less than # years old,?
#$ What /ind of houses ould you .e illin' to see? 2ar/ all that apply$
3ne 4tory 2 story 4plit 5oyer 4plit level
(onhouse6condo 2o.ile home
%$ What style of house appeals to you most?
&ontemporary (raditional 4outhestern &olonial
-o 7reference
7$ *o much renovation ould you .e illin' to do? A lot A little -one
"$ 1o you have to .e close to pu.lic transportation? 8es -o
9$ 1o you have any physical needs that must .e met, such as heelchair access?
10$ 1o you have any animals that ill re:uire special facilities? ;f so, hat?
11$ The lot 2ust *ave Would <i/e to have
<ar'er than 1 acre
4maller than 1 acre
5enced)in yard
=ara'e
&arport
7atio6dec/
7ool
*ot (u.64pa
>?tra 7ar/in'
3ut.uildin's
4pecial vie
The Interior
12$ *o many .edrooms must you have? Would you li/e to have?
13$ *o many .athrooms do you ant?
I live in Colorado My current career is Psychiatrist My current salary is $4,769
14$ *o .i' ould you li/e your house to .e +s:uare feet, -o less than@
-ot more than@
1#$ What features do you ant to have in your house?
2ust *ave Would li/e to have
Air &onditionin'
&arpet
&eramic tile
*ardood Aoors
>at)in Bitchen
5ormal 1inin' Coom
5amily Coom
=reatroom
1en or li.rary
Dasement
<aundry Coom
5ireplace
Wor/shop
-o ;nterior 4teps
Ein)laF apartment
4pa in .athroom
<ots of indos
1%$ Are there any other special features or needs that you must consider hen youGre
loo/in' for a home?
%fter filling out your wish list6 you get to go shopping for a house. You would normally go visit many
homes with your agent to find the best home to fit your needs. =e are going to do this online instead.
Use the following websites to find homes close to your ma<imum price from page 5.
www.iowarealty.com ??This one usually has the most informationF
www.9illow.com
www.coldwellbanker.com
http@66$neiltimmins$com6
$rema?$com
(here are many others, and you can use any e.sites that have home listin's$
I live in Colorado My current career is Psychiatrist My current salary is $4,769
5ind the top 3 homes that meet as many of your ish list items as possi.le A-1 are
close to your 2a? 4ales 7rice$ (hen 0ll out the folloin' ta.le@
Hou&e 1 Hou&e # Hou&e '
)ocation 1address2
)ist ;rice 3
Year +uilt
'tyle of home(
G of bedrooms
G of full baths
G of H baths
G of half baths
%bove Grade '8uare
ootage
)ower )evel inished '8uare
ootage
Total inished '8uare
ootage
)ot si9e 1either ' or acres2
Garage 1how many stalls&I
attached&2
oundation "omposition
D<terior composition
:riveway
G of fireplaces
#eat
%ir "onditioner
Gross Ta<es
'chool district
>ther selling points of
interest(
!ap the home using Google
!aps and tell about
positivesJnegatives of location
1e<( on busy street6 close to
grocery store6 close to public
transportation6 etc.2
%ssessed value of home from
;olk "ounty %ssessorAs page
1or iowaassessors.com2
)ast date and price of home
sale from %ssessorAs page
ind the home on
www.9illow.com to find out
how many days it has been
on the market
I live in Colorado My current career is Psychiatrist My current salary is $4,769
Use www.9illow.com to find a
nearby home that has sold
recently6 is a comparable
home6 and tell me how !U"#
it sold for
"hoose the house from above that meets most of your wishes and is close to your !a< ;rice. =hich
one did you choose& =hy&
Step /: Ma0e an oer"
This is the part where you decide how much you should offer. You would try to determine the fair market
value of the home by looking at the comparable homes in the area6 the assessed value6 and the last
sales price. =rite your offer here(
Step 1: Get a home in&pection
)etAs assume your offer was accepted. +ut before you buy a house6 you should always pay to have it
inspected. Go back to www.hud.govJbuying website. Under 'tep K6 "lick on the link or Your
;rotection Get a #ome $nspection.
=hy should you get a home inspection&
"lick on the 5- Luestions to %sk a #ome $nspector link.
#ow much does a typical home inspection cost&
*emember6 if the inspector finds a ma@or problem6 you have only lost that amount of money6 and you can
back out of your offer to buy the home.
Step 2: Shop or Homeowner& In&urance
Go back to hud.govJbuying. "lick on the link 5, =ays to )ower Your #omeowners $nsurance. D<plain
what each of the items below mean(
'hop %round(
*aise Your :eductible(
=hen YouAre buying a home6 consider the cost of homeowners insurance(
I live in Colorado My current career is Psychiatrist My current salary is $4,769
Step 3: Sign paper&
Go back to the first webpage to find this info( This is called the MMMMMMMMMMMMMM or settlement.
This is when you actually become the owner of the house. >h6 and you have to sign a T>B of
paperworkF
Home Owner&hip
Bow6 you get to live in the houseF That also means you have to make the monthly mortgage payments.
Use the mortgage calculator online at www.financialcalculators.com to figure up your monthly payments.
%ssume your offer was accepted.
Take your offer minus your down payment 1on page 52 to figure out the loan amount.
You are getting 0. interest on your loan.
%ssume you are paying it off over /- years with yearly amorti9ation.
YD'6 #ave the calculator estimate the ta<es6 insurance6 and private mortgage insurance.
=#%T $' Y>U* T>T%) !>BT#)Y ;%Y!DBT6 including ta<es6 insurance6 N ;!$&
Bow6 take your Yearly Gross $ncome 1given on card at beginning of this activitiy2 and multiply it by .K0
1this is assuming ,0. is taken out for ta<es2.
Bow divide that number by 5, months to find out your monthly net income.
=hat percentage is your payment of your monthly net income& 1hint( take monthly payment divided by
monthly net income2
:o you think this is a reasonable percentage& D<plain.