Buying a Home: Loans, Mortgages & Credit

Student Preparation: Dream Homes

[Time Required: 20 minutes]

1. Dedicate five minutes to journaling about your ideal residence, considering its location, dimensions, exterior color, and surrounding neighborhood.
2. Download the “Home Sweet Mortgage” activity sheet and allocate ten minutes to conduct online research for your envisioned home.
3. Identify the characteristics that define a “savvy” borrower. What factors did you prioritize when selecting mortgage options? (e.g., interest rate, loan terms, initial payment amount, etc.)
4. Explain how an individual’s credit history influences their eligibility for a mortgage and the underlying reasons for this connection. What qualities contribute to being a responsible borrower?
5. “Creditworthiness” is a key consideration during the mortgage request process.A particularly significant red flag for mortgage lenders is a foreclosure. A foreclosure occurs when a borrower defaults on their mortgage payments, prompting the lender to seize and sell the property to recover the outstanding loan amount.Foreclosures can result from various circumstances, such as job loss, health issues impacting earning capacity, accumulating debt, or divorce.
6. Even if homeownership appears to be a distant goal, your “creditworthiness” will also affect your ability to secure an apartment lease. This underscores the critical importance of establishing and maintaining a positive credit history.

Challenge: buy It or Pass?

[Time Required: 15 minutes]

1. Download the “Buy It or Pass?” activity sheet and spend ten minutes completing it.
2. what insights have you gained regarding the process of purchasing a home? Has your perspective shifted as the commencement of this lesson?
3. Consider how homeownership can foster financial stability and wealth accumulation. For instance, fluctuations in a home’s market value relative to its original purchase price can impact whether the investment yields a profit or a loss. What are the advantages and disadvantages associated with owning a home?

Reflection

[Time Required: 5 minutes]

Record in your notebook actionable steps you can take to make your dream home a reality (e.g., consistently paying bills on time to build credit, saving for an initial down payment, etc.).