Mortgages

Mortgages

Personal Finance

Mrs. Reynolds

What is a Mortgage?

• Money borrowed (loan) for the purpose of purchasing property, usually a house.

• Property is used as collateral

• Most common mortgages have 15-30 year terms.

Mortgage Basics

Mortgage Calculator

• A mortgage calculator allows you to see what your monthly payments may be based on interest rate, down payment, and principal amount.

• Also allows you to see how much interest you will be paying

How much Home Can You Afford?

• Average rule of thumb:

  • You can buy a home costing 3 times your annual salary

• You are responsible for EVERYTHING!

• Own the property and no longer have to make payments after mortgage is paid

• Good if you plan to live in an area for years.

Buy

• Landlord responsible for repairs

• No property owned at the end of lease

• Good if you plan to live in an area for a short amount of time

Rent

Rent or Buy?