https://docs.google.com/open?id=0B2mk7v8cXovLMjQyNjdiMmEtZDNkYy00YmY2LWExNmQtZWZmNjRlMDI5MTRj
CHAPTER: HOUSING &
TRANSPORTATION
HOUSING
ANNUAL EXPENSE ON HOUSING
Average
American family spends 25 % (1/4) of their annual (yearly) income on housing.
The average family moves every 4 years.
5 TYPES OF HOUSING
SINGLE FAMILY
HOUSING
Free standing house
Single Family Housing units are
usually the most expensive.
· 60% are Owned
· 40% are Rented
Þ Advantages-
Best privacy, allows ownership to upgrade (historic district) you can change
whatever you want.
Þ Disadvantages- Youre responsible for all repairs, Real estate taxes, must cover
all expenses (costs) (insurance, repairs, painting, etc.)
TOWN HOMES
· 3-5 units connected to each
other, 2-3 floors
· Have a shared walls with
neighbors
· Has front /backyards, maybe a
driveway
· Are small in size
· Cheaper but less privacy
· You own your unit
CONDOMINIUMS
· Like an apartment, hotel, motel,
but you can own your unit. (Many in Florida)
o
Have
common hallways
o
Land
owned jointly (you share land)
· Must pay a monthly up keep fee:
to keep everything looking nice (the cleaning lady)
· You must jointly approve changes
in common areas.
COOPERATIVES
(CO-OP)
· Same building as a condominium,
ownership is different
· You own a share of the building
· Tenants DO NOT own the units, they lease them
· All expenses are shared
· If you want to sale… it means
you sale your share.
Þ Disadvantages
o
Must
get approval to remodel, rent or sell
MOBILE HOMES
· Pre-fabricated (made before
hand) housing (trailer)
· Low cost housing
Þ Pros
o
Cheaper
o
Taxed
as motor vehicles
o
Have
to find a location, damaged easily, depreciate yearly
Þ Disadvantage
o
Damaged
more easily in a storm. Not Safe
o
Limited
life span, it depreciate (goes down in value)
o
Hard
finding a place to put the trailer.
DOWN PAYMENT
· The more you put down, the lower
your monthly note.
· You cannot borrow money for the
down payment
· Usually at least 20%
· Putting down a down Payment
proves responsibility
MORTGAGES
The money you owe on the house
Typically for 30 years
MONTHLY NOTES
Divide what you owe into a # of payments + interest
EQUITY
The value of a property beyond any amounts owed on it
(The house is worth more than you owe)
CLOSING COSTS
Paid when purchase is final
$500 - $1000
(Title Search, lawyer fees, house inspection, property
survey (inspection)
ASSEMBLE MORTGAGE
How much of the house you have paid off
2ND MORTGAGE
Like a forced savings account
AUTOMOBILES
DOWN PAYMENTS
The money you pay up front to pay
for the car
It can be as little as zero to half.
WARRANTY
· When you buy a car, you get a
warranty. It means if anything breaks in the first 3 years the car company will
fix it for free.
· Warranty usually lasts for 36
months, 36,000 miles it is which you hit first.
· When you buy a new car… they
will offer you an extended warranty. You spend extra money for an extended warranty.
· If you buy a used car, it will
mostly say as is… meaning as it is, no warranty.
DEPRECIATION
Value goes down, worth less money
Cars depreciate every year
REGISTRATION FEE
When you buy a car you must go through inspection and
then you pay $107 for your tags.
In Mississippi: You are taxes depending on your car and
the costs.
CAR INSURANCE
Liability
Covers damages to the other guy
(medical, car damage) if it is your fault
State law in TN requires
liability insurance
YOU CANNOT DRIVE WITHOUT
LIABILITY INSURANCE.
No deductible.
Collision
Covers damages to your car
(COVERS CAR REPAIRS)
Comprehensive
Covers
anything else other than a collision (wreck)
Ex. Hail storm, Tree branch
falls on your car, someone breaks into your car.
Medical
COVERS HOSPITAL
It would pay for your medical
injuries.
Most people do not need this
because they have health insurance.
If you do not have health
insurance, then you can buy medical insurance
GROUP RATES
Worst drivers (highest rates/costs) Young Single Men Age 16-24 because more likely to speed and
to drink & drive.
2nd Worst: 16-24 single women
3rd Worst: Old People
Best rates (lowest costs): 25-45 married women
DEDUCTIBLE
What you pay first before the
insurance pays (kicks in)
You can change the deductible, so
you should know the deductible.
If you raise the deductible then it
will lower your payments.
IF YOU GET INTO A WRECK… What to
do:
If you get in a car wreck and it is someone elses fault
make sure you call the police Ask the police to ask the other person if they
have insurance. You need a police report.
OTHER TYPES OF INSURANCE
· Homeowners
o
INSURANCE
FOR YOUR HOUSE
§ Property- pays for damage to property
(The House)
§ Liability- medical expenses of others
injured while on your property (children, roofers, etc…)
§ If you are renting do you need insurance? Yes but it is renters
insurance.. to cover the stuff in the house.
· Life Insurance (DIE)
o
Term-
20 years (or 10)
Þ You buy it for a specific number
of years
Þ Set up to make sure your
children are taken care of
Þ You never get your money back
Þ It is there to pay
o
Whole
Life
Þ You pay for your entire life
Þ Lasts your entire life, but you
can cash it in later in life (get money out)
BENEFICIARY
Who gets the money once someone dies
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