Renting a HOME
the homeowner owns a unit
refers to the arrangement where an
individual or a group of individuals
(tenants) pay a periodic fee to a
property owner or landlord in
exchange for the right to live in and
use that property for a specified
period of time.
Advantage in owning and renting
Renting
- Limited financial obligation
- Limited maintenance expense
- more liquidity
more mobility
Owning
- store of value and possible equity
growth
- lifestyle choices
- decorating/renovating choices
- pride of ownership
- tax deduction for mortgage interest
- more predictable housing expenses
Disadvantage in owning and renting
Renting
- no equity growth or store of value
- lifestyle limitations
- decorating/renovating limitations
- less predictable housing expense
Owning
- substantial financial obligation
- significant annual expenses
- less liquidity
- less mobility
Assessing Attributes
Mobile Home
are large trailers fitted with utilities
connections, which can be installed on
permanent sites and used as
residences. A mobile home may also be
situated in a trailer park or mobile home
community where the owner rents a lot.
Condominium
in a multiple-unit dwelling, but the
common areas of the building are
owned and managed by the
condominium owners’ association.
Cooperative Housing
is a unit in a building or
complex owned by a nonprofit
association or a corporation for the
residents’ use.
Assessing Affordability
requires a comprehensive
understanding of your financial
situation and the costs associated
with owning or renting a home.
1. Determine Your Budget
2. Consider the 30% Rule
3. Factor in Other Housing Expenses
4. Use Online Calculators
5. Consider Your Future Plans
6. Account for Emergency Fund
7. Be Realistic
8. Review Different Housing Options
9. Credit Score and Debt-to-Income Ratio
10. Seek Professional Advice
Identifying the Market
Housing costs are determined
by the price of the house and by the
price of the debt that finances the
house. House prices are determined
by forces of supply and demand,
which in turn are determined by
macroeconomic circumstances.
IDENTIFYING THE FINANCING

Down Payment
Mortgages require a down payment,
or a percentage of the purchase
price paid in cash upon purchase.
Most buyers use cash from savings,
the proceeds of a house they are
selling, or a family gift. The size of
the down payment does not affect
the price of the house, but it can
affect the cost of the financing.
Monthly Payment
The monthly payment is the ongoing
cash flow obligation of the loan. If
you don’t pay this payment, you are
in default on the loan and may
eventually lose the house with no
compensation for the money you
have already put into it.
Mortgage Designs
"Mortgage designs" typically refers
to the various types or structures of
mortgage loans available to
homebuyers.
Points
are another kind of financing cost.
One point is one percent of the
mortgage. Points are paid to the
lender as a form of prepaid interest
when the mortgage originates and
are used to decrease the mortgage
rate.
Closing Costs
refer to the fees and expenses
associated with the final steps of a
real estate transaction when
purchasing or refinancing a property.
These costs are paid at the
"closing," which is the point when the
ownership of the property is
transferred from the seller to the
buyer or when refinancing a
mortgage.
Purchasing and owning your
home
Purchasing Process
you will make an offer to the seller,
who will then accept or reject your
offer. If the offer is rejected, you may
try to negotiate with the seller or you
may decide to forgo this purchase.
Capital Expenditures
typically refer to the substantial
expenses incurred for improving,
renovating, or maintaining the
property after the purchase.
Early Payment
refers to making additional or larger-
than-required payments toward the
principal of the mortgage loan before
the scheduled due date.
Refinancing
means borrowing a new debt or
getting a new mortgage and
repaying the old one. It involves
closing costs: the lender will want an
updated appraisal, a title search, and
title insurance.
Default
occurs when a borrower fails to meet
the terms and conditions outlined in
the mortgage agreement.
Foreclosure
is a legal process initiated by a
lender to repossess and sell a
property due to the homeowner's
default on the mortgage payments.
Mortgage
fraud refers to any deliberate
misrepresentation, omission, or
misleading information provided by a
borrower, lender, or other parties
involved in a mortgage transaction
for the purpose of obtaining a loan or
influencing the terms of the loan.
 the terms and conditions of your
personal risk management: policy before you purchase it.
insurance

Insurance is a contract between

an individual or business with an
insurance company to provide
financial protection and mitigate
the risks associated with
unexpected events . In exchange
for a fee, called a premium, the
insurance company agrees to
compensate the policyholder for
losses incurred as a result of a
covered event.

various factors to calculate

premiums

Types of insurance

it is important to shop around and

compare prices from different
insurance companies. You should
also make sure that you understand
 Commodity Market

COMMON TYPES OF INVESTMENT AND

FINANCIAL MARKETS

Foreign Exchange Market