DIRECTIONS

1. Understand real estate terms by going to the web sites listed under the Research section of the Resources link.

2. Look for houses in the web sites listed under the Real Estate section of the Resources link.  Select a house that you think would be within your budget. Stick to around $400K-$600K.  (You may have to settle for a town that is not what you always dreamed of because of the high prices of houses on Long Island.  However, remember that the rule of thumb is location, location, location; experts agree that your best bet is to buy the smallest house in the nicest area.)  Print out the information about the house that you select.  You can screenshot this information.

3. Look at mortgage rates in the web sites listed in the Bank Mortgage Rates section of the Resources link.  Research three different banks with three different 30-year fixed interest rates using three different credit scores (bad, good, and excellent).  Select a bank that you can get a mortgage from.  Note what the interest rate is for a 30-year fixed rate loan and what the points or fees are.  Also note if you can put down less than 20 percent.  (Most banks make you put down 20 percent, and if you put down less, they charge you more in interest, and you'll definitely have to pay PMI.)   Print out the information about the mortgage that you select.  You can screenshot this information.

4. Using Excel or Sheets, set up a workbook according to the following directions and save it as house hunting.  In the first worksheet (label it as house), neatly lay out the details about the house.  Insert a text box and succinctly explain why you chose this house.  The more rationale you give, the more points you'll earn.  Attach your house printouts to this worksheet.

5. In the second worksheet (label it as mortgage), neatly lay out the details about the bank mortgages that you researched and show a comparison of interest rates, points values, monthly payments, and the difference in the total payout over 30 years between each of the mortgages.  Then insert a text box and succinctly explain which mortgage you would go with and why.  Staple printouts of your mortgage research to the back of this spreadsheet.

6. Then in the third worksheet (label it as payments), neatly lay out a section to set up a formula to determine what your mortgage payment would be including principal and interest using the payment formula that we’ve done in class (360 payments over 30 years).  Then add to this number $300 for PMI.  Then add 1/12 of the property taxes that you find in the house research, and if you can't find a property tax value listed in your house research, then add $1,000 for property taxes (assuming that taxes on the house will average around $12,000 a year).  Then add in your homeowner's insurance of $125 (or insert whatever homeowner's insurance value you research).  Next to each figure, state how you arrived at that number.  Use a sum formula to add the total of the principal, interest, PMI, homeowner's insurance and taxes.  This would be your monthly mortgage payment.  Show all work in a neat fashion and attach any screenshots of research that you find such as finding your own value for the homeowner's insurance.

7. In the fourth worksheet (label it as budget), set up a new monthly budget using the updated figures given in the scenarios.  Follow the budget in the problem as a guide, and then insert your own numbers.  Show research for your figures using screenshots of any research.  For example, if you change the amount for the cable tv/phone/internet, show a screenshot of where you got your figure from such as a screenshot from Fios.  Remember, when you get a house many items in your budget will change.  Insert a textbox that explains how you arrived at each of your figures.  

8. In the fifth worksheet (label it as analysis), insert a large text box and write a paragraph on whether you think buying a house at this time is a good idea or not.  Answer these questions:  

   1. ​What house did you pick and why? 

   2. What bank did you pick and why? 

   3. Can you comfortably afford this mortgage based on our current salary (explain why or why not)?   

   4. Will you be left without any money to save each month? 

   5. Will you be able to save at least 10% of your income still with the mortgage? 

   6. Will you be operating at a surplus or a deficit if you get this mortgage now?  

   7. If you can't afford the mortgage, what would be your game plan for affording it in the future? 

   8. Will buying a house help your tax deductions, if so, how?  

   9. Knowing that owning a home is more expensive on a monthly basis than renting an apartment, why would you want to buy this house--as in what are the advantages and disadvantages of owning a home?  

   10. Add any other thoughts that support your position.

9. Make sure that you include a Google Doc that includes screenshots of all of the websites you used--especially for the house and for the mortgage rates.  The houses get taken down from the real estate websites and the rates change daily so screenshot them on the day you find them.  Turn this Google Doc in to Google Classroom along with your Google Sheets (you should have 5 spreadsheets in total.)