Unit 5 Lesson 6 - Buying a Home

A(n) ____ is a loan in which the property purchased secures the loan.

mortgage

The value of a home minus the amount still owed on the loan representing the worth of a home in real terms to the homeowner is called ___.

equity

Match the descriptions with the types of residences. 1. a home that is the most expensive and most difficult residence to maintain 2. an apartment-like dwelling in which units are individually owned and costs of maintaining common grounds are shared 3. an economical residence that does not always hold its value and is susceptible to storms 4. a city-based residence with a porch that is less expensive than a single-family home

1. single-family home 2. condominium 3. manufactured home 4. townhome

Match the loans with the statements. 1. Neither the rate nor mortgage payments change in these loans, which are available to all buyers. 2. The rates and mortgage payment can change as the Federal Reserve changes interest rates. 3. The federal government insures these loans, which are a legacy of President Roosevelt's New Deal. 4. Members of the military and veterans may qualify for lower interest rates and no down payment.

1. standard fixed-rate loan 2. flexible-rate loan 3. FHA loan 4. VA loan

Select FOUR important steps to purchase a home.

- Select a real estate agent. - Hire an expert to do a home inspection. - Make arrangements for utilities and insurance. - Get pre-approved for a loan.

Why might a homebuyer choose not to use all of the credit extended by a lender?

Banks might agree to loan a homebuyer more than he or she can reasonably handle.

A(n) ____ tax is assessed against the value of the home and the land it sits on.

property