Students learn about buying a house including reasons, financing, and the costs and benefits.
Teaching Objectives:
- Discuss the reasons that people buy.
- Explain the elements of a mortgage (e.g., down payment, escrow account, due date, late feeds and amortization table).
- Explore the different types of lenders and housing loans.
- Recognize other costs associated with homeownership, such as maintenance, homeowner associate fees, etc.
- Evaluate the costs and benefits of homeownership.
Standard 10: The student will explain and compare the responsibilities of renting
versus buying a home.
Suggested Grade Level
7th – 12th Grade
Lesson Excerpt:
Buying a house is the most expensive purchase many people make during their lifetime. Homeownership is often the fulfillment of a dream, a source of pride, and a sense of independence. Few people can afford to pay cash when purchasing real estate—especially with the average home price in the United States approaching $175,000. Financing a home requires a mortgage, and mortgages include interest which increases the overall price of the house.
Unlike other purchases, the cost of insurance can be included in the monthly payment as well. Adding interest and insurance to the mortgage payment is a convenience, but also increases the monthly payments. Additional costs of homeownership include the cost of landscaping, mowing, pest control, and contributions to a savings account to cover the costs of any emergency expenses such as replacing a hot water heater or washing machine.
