#2639. Steps to purchase a home

other, level: Senior
Posted Wed Aug 21 08:48:12 PDT 2002 by Jane (jhinrichsen@isd622.org).
North High School, North St. Paul, MN, USA
Materials Required: computers, information on basic home buying
Activity Time: several days, (3 for 88 minute blocks)
Concepts Taught: Basic steps to get into a home, qualify, etc

I partner the students as couples. The following are the couples names and the jobs, income and some of the bills that the couple may have together. I have the students get with their partner, then pick these out of a hat and read them to the class. They love this. They get to see who is going to be wealthy who is struggling, what it does for your income if you go to college, etc. We do a great deal of laughing.

I then give the students a sheet with the project and what they have to do to complete the home buying. (Sheet following couple descriptions) We use the web site Edina.com. It is wonderful and helps the students qualify for the home and figure their home monthly payments. In Minnesota the Attorney Generals office puts out a wonderful FREE handbook on buying a home. I have a study guide that goes with that handbook and they get basic reading and understanding for the home purchase. We do this before I introduce the project. Following the couples descriptions are the basic guidelines that I give the students for the project. It is not easy for them but they learn a great deal for their future and they begin to realize how expensive life really is for their families.
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Family of three

Male (David) just starting out as an engineer making $48,000 a year. Female (Jessie) staying home with new baby Amanda. You have one car payment at $199.00 monthly. You also have a $50.00 a month student loan.

Family of four

Doctor Thomas Roach: Salary $155,000

Wife Lily Roach: part time librarian $20,000 a year.

Kids in part time day care $200 a month.
Car loans $630 a month.
Student loans $250 a month.
Credit cards $75 a month.

Children, Susie 4, Ben 2

Family of 6

Mom (Bev) Secretary $22,000 a year.

Dad (David) Factory assembly $34,000 a year.

Car loan $300 a month.
Credit cards $50 a month.
Braces for Jim $25 a month.
Other children, Rita 16, Jeff 14, Jason 10

Husband and wife are both teachers.

Bob $35,000 year. Pat has her master's $40,000 year.

2 children in after school day care at $95 a week.
Car payment $350 a month.
Student loans $45 a month.
Credit cards $50 a month.

Single person with roommate

George $62,000 a year, chemical engineer.
Car payment $300 a month.
Child support for one $700 a month.
Income from room mate $400 a month.

Single person

Gabriel $105,000 a year as a computer programmer.
Car payment $250 a month.
Credit card $20 a month.

Jeff and Martha

Jeff business manager $50,000 a year.
Martha Secretary $25,000 a year.

Inherited money and invested wisely in the stock market. Now you have 1.5 million dollars.

Car payment $500 dollars.
Credit cards $60.00 a month.

Jill works as teachers aid $13,500 a year.
Jason works as Executive editor $80,000 a year.

1 child Jim: no day care

Car payments $450 a month.
Credit cards $75.00 a month.

Bert and Greta retired on $250,000.

No car payments.
No credit cards.

Receive interest check for $400.00 a month.
Together receive social security for $1,324.00 a month.

Steve and Sally

Steve, bank loan officer $55,000 year.

Sally stays home.

No car payments.
Credit card $25.00 a month.

Joe and Katrina

Joe tele-marketer $20,000 a year. Katrina works part time at Target $10,000.

No daycare. One daughter age 4.
No car payment, credit card $100 month.

Lucy and Rick

Lucy stays home. Rick insurance sales $95,000 a year.

Boat payment $300 a month.
Car payment $250 a month.
Credit card $115 a month.

Two children Jane and Michael in grade school.

Kurt and Marlene

Kurt company vice president $95,000 a year.
Marlene flight attendant $45,000 a year.

Josh 18-college.
Jeremy 20-college
Tuition per year $20,000.
Car payment $250.
Visa $150 a month.

Newly married couple just out of high school.

Mary $15,000 a year working at K-mart.

Dale $17,000 a year working a Menards.

Credit card debt $85 a month.

Married couple just graduating from college

Kris, Assistant manager at Applebee's $35,000.

Kelly, Cook at Applebee's $25,000.

Student loan $150 a month.
Car loan $200 a month.
Credit card debt $80 a month.

Maryanne unemployed

George Realtor $100,000 a year.

Car loan $500.
Credit card loan $150 a month.

Joann and Greg

Joann craft sales $20,000 a year.
Greg electrician $45,000 a year.

Car payments $450 a month.
Credit cards $95 a month.

Sandy and Mike

Sandy is an office manager with a Master's degree. She makes $50,000 a year. Mike is a Government Social workers and makes $40,000 a year.

They have two children ages 8 and 13. They two car payments of $375.00 a month and a Visa bill of $75.00 a month.

Joni and Tim

She is a secretary and makes $19,000 a year. Tim is a Sales manager and makes $70,000 a year. They have a boat payment of $225 a month and a car payment of $200 a month.

The do not have any children yet but are hoping to start a family soon.

Calvin and Trisha

Calvin works for Jiffey Lube changing oil and makes $25,000 a year. Trisha is a day care provider in her home. She takes care of 4 children and makes $15,000 a year.

They have two boys ages 2 and 3 and do not have any day care expenses.

They have a car payment of $125.00 and a visa bill of $25.00 a month.

April and Gordon.

Gordon is a news paper reporter and makes $70,000 a year April works part time and makes about $7,000 a year.

They are in the empty nest stage and they have one car payment of $350 and are looking for a condo to live in so that they do not have to have any more
yard care issues.

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Home Project

You and your partner are purchasing a home. You will be assigned a job and a salary. You could have a salary that puts you in a trailer park or a million-dollar home. The following will be the qualifications for the project. Refer to classroom information for help with planning.

1. Calculate 28% of your monthly income to see what you will qualify for during your purchase. Decide on a down payment.
2. Sit down together and decide what your family needs and wants will be when purchasing your home.
a. List requirements, layout, style, location and prices.
3. Go through the Internet on real-estate web-sites and choose 3 homes that would meet your needs.
4. Then choose one of the homes as your new pretend home.
5. Estimate what your monthly payment would be if you were to purchase the home.
6. Find an insurance site, choose a policy type for your home and estimate the cost of your policy.
7. Find out what your property taxes will be from the home web-site.
8. Present your findings to the class.

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Project will be graded on the following.

1. Neatness of the project. 10 points

2. Classroom presentation. 10 points

3. Show your calculations figuring 28% of your monthly
income. 5 points

4. Include down payment amount. 5 points

5. Enclose a list of the requirements you made for your
home. 5 points

6. Find three homes that meet your needs and then choose one. Explain why you chose this home for your make believe family. 10 points.

7. Estimated monthly payments. 10 points

8. Estimated insurance costs or explanation of insurance coverage needed for your home. 10 points

9. Find annual property taxes. 5 points

10. Report what you have learned from the project and what difficulties and successes you may have had during the project. 5 points