Buying A House Part 1

How to Buy a Home
Part 1
This lesson guides students as they decide how much they can
afford to spend on a home purchase and what type of home
they would like to buy. It also gives helpful hints in choosing a
realtor.
Learning Objectives:
1. Students will interpret a chart.
2. Students will list the features they would like in a home.
3. Students will identify ways to choose a realtor.
HOW TO CHOOSE A REALTOR
A Real Estate Agent (realtor) is a person whose job is

to help people buy and sell property and homes. A realtor
has special training and can help you through the
complicated process of buying a home.
It’s important to choose a realtor that you think you

can work with. They should be friendly and happy to
answer your questions. It would be very good if the realtor
speaks your native language or has experience working with
immigrants.
Realtors are listed in the yellow pages of the phone

book. You can also ask friends, family members and
neighbors if they know a good realtor.
It is a good idea to meet the realtor to decide if you
would like to work with them. If they seem too busy or
rude, you should choose another realtor.
Definitions
Property=land acreage
Training=learning how to do something, going to school
etc.
Complicated=confusing, difficult to understand
Process=things that happen one after another, a series of
actions
1. Name two important things to look for when choosing a

realtor.________________________________________
2. If the realtor seems too busy and rude, you

should__________________________________________
HOW MUCH CAN YOU AFFORD?
One of the first things a realtor will do is help you decide

how much you can afford to spend on a home. It is a good
idea to decide how much you can buy even before you meet
with the realtor. Then you will begin looking at homes in your price range.
WHAT IS A MORTGAGE?
When you buy a house, usually you do not have enough money to pay cash
for the whole price of the house. You pay a down payment and borrow the rest of
the money. The borrowed money is called a mortgage. You make a payment every
month (monthly) to the mortgage company that you borrowed from. They will
charge you interest on the money you borrowed. There are different interest rates
on mortgages. (In Lesson 9 we will learn more about mortgages.)
DEFINITIONS
Price range=the lowest to the highest amount of money

you can afford to spend on a house ( example- $50,000-
$65,000 )
Down payment=a percentage of the selling price of the

house
Interest rates= different percentages of the borrowed

amount that has to be paid back
WORKSHEET 8-C
The following chart will help you determine how much you can afford
to spend on a house.
Monthly Payments on a 30-Year Fixed Rate Mortgage

(Monthly payments shown include principal and interest only.
Real estate taxes and homeowners insurance are not included.)
Loan Amount Interest Rates

6.5% 7% 7.5% 8% 8.5% 9% 9.5% 10%
$25,000.00 158 166 175 183 192 201 210 219

$30,000.00 190 200 210 220 231 241 252 263
$35,000.00 221 233 245 257 269 282 294 307
$40,000.00 253 266 280 294 308 322 336 351
$45,000.00 284 299 315 330 346 362 378 395
$50,000.00 316 333 350 367 384 402 420 439
$55,000.00 348 366 385 404 423 443 462 483
$60,000.00 380 399 420 440 462 483 505 527
$65,000.00 411 432 454 477 500 523 547 570
$70,000.00 442 466 489 514 538 563 589 614
$75,000.00 474 499 524 550 577 603 631 658
$80,000.00 506 532 559 587 615 644 673
1. Juan Smith wants to buy a house that cost $50,000.00. He has saved
$5,000.00 for a down payment. He will have to borrow $45,000.00 at 8%.
How much will his monthly payment be?
2. Teresa Riveres knows she can afford to spend $399.00 a month on a

mortgage payment. The interest rates are at 7% right now. How much can
she afford to spend on buying a house?
A. $80,000.00 B. $60,000.00 C. $25,000.00
3. How much can YOU afford to borrow from a mortgage company?
*How much do you pay right now for rent?_______
*What are interest rates for mortgages now? (Let’s say they are
7.5%.)______
*Look at the chart under 7.5% and stop when you see the amount you pay
for rent right now.
*Look over to the “Loan Amount” column and you will have the amount you
can afford to spend on a house.
WORKSHEET 8-D
WHAT KIND OF HOME DO YOU WANT?
Think about the kind

of house you want. Look at
the list of ideas to help you
decide.
*ranch (one floor)

*two-story (two floors)
*new home
*older home
*big yard
*small yard
*central air
*fireplace
*brick exterior
*siding
*how many bedrooms?
*how many bathrooms?
(“1 bathroom” means a sink, a shower/tub, and a toilet. ”1/2 Bath” means a sink
and a toilet.)
*close to a school?
*close to shopping?
*close to public transportation (bus)?
Describe the kind of home you would like to

buy._____________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________

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How to Buy a Home

1. Students will interpret a chart.

2. Students will list the features they would like in a home.

3. Students will identify ways to choose a realtor.

HOW TO CHOOSE A REALTOR

A Real Estate Agent (realtor) is a person whose job is

It’s important to choose a realtor that you think you

Realtors are listed in the yellow pages of the phone

1. Name two important things to look for when choosing a

2. If the realtor seems too busy and rude, you

One of the first things a realtor will do is help you decide

Price range=the lowest to the highest amount of money

Down payment=a percentage of the selling price of the

Interest rates= different percentages of the borrowed

Monthly Payments on a 30-Year Fixed Rate Mortgage

Loan Amount Interest Rates

$25,000.00 158 166 175 183 192 201 210 219

2. Teresa Riveres knows she can afford to spend $399.00 a month on a

A. $80,000.00 B. $60,000.00 C. $25,000.00

3. How much can YOU afford to borrow from a mortgage company?

*How much do you pay right now for rent?_______

WHAT KIND OF HOME DO YOU WANT?

Think about the kind

*ranch (one floor)

Describe the kind of home you would like to

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