Economics

UPDATED NOTES

DOWN PAYMENT for MORTGAGE

·       BANK WILL NOT LOAN YOU 100%

·       You must come up with 10% to prove you are responsible

·       You cannot borrow money for the down payment

·        The more you put down, the lower your monthly note.

·       Usually at least 10%

·       Usually for 25-30 Year loan

·       Putting down a down Payment proves responsibility

MORTGAGES

            The money you owe on the house for the load

EQUITY

How much of the house you own

The value of a property beyond any amounts owed on it (The house is worth more than you owe)

2^ND MORTGAGE

When you borrow money from the equity

Like a forced savings account

YOU CAN BORROW MONEY FROM YOUR EQUITY… Your parents can get $20,000 out of equity.

ASSUMABLE MORTGAGE

The person takes over your mortgage, your house note.

You pay the person the equity and take over their note. 

PRINCIPAL

 Original amount of the loan

           

MONTHLY NOTES

Divide what you owe into a # of payments + interest

           

CLOSING COSTS

            The meeting where the house changes hands

Paid when purchase is final

$500 - $1000

WHAT HAPPENS AT THE CLOSING

1.     Title Search: make sure the person has the right to sell the house

2.     Property Survey (where is the property line)

3.     Inspection: by the bank to make sure it is worth the value and make sure there is no termite damage

4.     Lawyer fees

5.     Real Estate Agent:

a.      The seller pays the real estate agent

6.     IF you don’t want to use a real estate agent: FSBO: FOR SALE BY OWNER