Purchasing a Home

Neema Y. Smith

•I am 28 years old; have been working for 7 years and have saved $42,000.00

Intro

7 Most Important Aspects of Buying a House:

• Searching Process• Actual buying process• Choosing Process• Price• Situation• Ability to make payments• Make sure that you like it

Searching Process

• The searching process is important because it helps the buyer to ascertain what they want/need, and helps them to get a feel of the market they are buying in.

Actual buying process

• The actual buying process is one of the most important aspects of buying a house. The buying process is key because it is during that process that the buyer can actually attain their home. This is usually the last step.

Choosing Process

• The choosing process and the searching process are very similar, yet the choosing process , the buyer settling on the home they want to purchase, is a key confirming point in the home purchasing procedure.

Price

• A home’s price is crucial because that’s how much the buyer will be paying for it.

Situation

• A buyer’s situation is key because it determines what type of home a buyer needs. A buyer’s situation also determines the next aspect…

Ability to make payments

• The buyer’s ability to make payments well and on time determines whether or not they can afford the home.

Make Sure You Like It

• If you are the buyer and are passionate about the home you are buying, then not only will you be more likely to try to afford the home, but you would also consider putting more work and/or money into it.

My Choice…

• I’m looking for a small apartment/condo in the city – something different than your hum-drum house.

• At 28 I don’t plan to have any kids, but I’ll need room for my artwork (office, studio, etc.)

• Key selling points for me are big windows, open, airy space, and interesting architectural features.

and I chose…

4620 Piedmont Row Drive #706D, Charlotte - South, NC 28210

Property Type: CONDO/TH

Lis t Price: $250,000

The Home

Information

• Beds: 2• Full Baths: 2• Sq Ft: 1000 - 1300• Year Built: 2006

Monthly C ost =

$1 ,691

25 yrs .Loan Te rm

$50E st. H om e

Insurance

$258E st. Prope rty Taxe s

$1 ,330Principal & Inte re st

Inte re st Rate = 7%

D own Paym e nt =

$42,000

$246,504.47 $1,439.85$327.10$1,766.9511

$246,175.47 $1,437.94$329.01$1,766.9512

$246,831.57 $1,441.75$325.20$1,766.9510

$247,156.77 $1,443.63$323.31$1,766.959

$247,480.08 $1,445.51$321.44$1,766.958

$247,801.52 $1,447.37$319.57$1,766.957

$248,121.10 $1,449.23$317.72$1,766.956

$248,438.82 $1,451.07$315.88$1,766.955

$248,754.70$1452.90$314.05$1,766.954

$249,068.74$1,454.72$312.23$1,766.953

$249,380.97$1,456.53$310.41$1,766.952

$249,691.39$1,458.33$308.61$1,766.951BalanceInterestPrincipalAmountPayment

Simple Interest

• Simple interest is when one set amount of interest is received once every year.

• Compound Interest is when interest is added to an account multiple times every year, and the interest earns interest.

Compound Interest

• I have a successful career as an experienced graphic designer…

○ Ability to make payments?

S alary = $75,000/ye ar

○Afte r taxe s = $69,525

○Incom e /m o. = $5,793.75

I will be paying back $280,084.40 in inte re st ove r the loan

te rm .

DEBT / INCOME

- Debt/Income is the ratio of how much I have to pay and how much I am bringing in.

○ Ability to make payments?

DEBT / INCOME =

$1 ,691 / $5,793

D e bt / Incom e = 29%

• I will be able to make payments on time.

- With the $42,000 that I’ve saved up, I can:

• Put money down on the house

• Pay for furniture

• Redecorate (paint, for example)

- I decide to use the money for a down payment. The more I pay at the get-go, the less time it will take for me to finish paying off the condo.

The amortization calendar I previously showed

demonstrated the first 12 months of payment. After

25 years the total loan, including interest, will be

paid off.

Credits:

•“MistyWisp” for slide 9 art• MyAmortizationChart.com for amortization chart – slide 8