Case Study Questions: 1. List and describe four types of housing the Seyed should consider. 2. Determine the maximum mortgage payment that Seyed would be qualified to pay. 3. What would be the accelerated biweekly payment on his mortgage? 4. At an amortization period of 25 years, what is the maximum mortgage amount that Seyed would be qualified to receive? 5. If Seyed makes a 20% down payment, what is the maximum value of the home that he would be qualified to purchase? 6. Including maintenance, closing costs, and his required down payment, how much money does Seyed need to set aside? Personal Financial Planning Principles - Chapter 7 Mini Case Study: Home Ownership This case study is to develop your skills and abilities to select and purchase a home, calculate the closing cost, monthly costs, mortgage and mortgage repayment amounts. Objectives: After completing this case study activity, you will be able to: Explain the different types of housing available. List the cost associated with purchasing a home. Discuss and calculate the approved maximum mortgage amount and the maximum mortgage repayment amounts given by the financial institution. Instruction: 1. Read the following case study 2. Discuss with your group, the different type of housing, the associated cost in purchasing a home, the approved mortgage and payment amounts given by the financial institution. 3. Discuss and calculate the answers for the Case Study questions listed below. Introduction With a raise from his employer, an investment firm, Seyed Adbullah, 31, is inspired to look for a new home. He has come to you for help. Financially, he is fairly secure, but he is averse to risk. His salary is $93,000 a year, but he does not know how much he should spend on purchasing a home. His current housing expenditures include rent for his apartment of $1,600 per month and tenant's insurance premiums totaling $300 per year. Although he has been paying his rent on a monthly basis, Seyed would prefer the accelerated biweekly payment frequency for his mortgage payments. His month bills include a $500 lease payment for his 2012 Acura MDX and a $300 loan payment. Sayed has research has shown that property taxes and home insurance premiums for the average home in the city in which he lives, are about $2,400 and $450 per year. He is unsure of the maintenance and heating costs, but estimates them at $1,000 and $1,300 per year. Given how busy he is at work, Seyed thinks that a high-end condominium might best suit his lifestyle. The condominium fees associated with the property would be about $400 per month. Seyed wants to own his home, since as the real estate values increase, the value of his home will increase. Local property values have been increasing at 5% per year over the past seven years. One concern about buying a home is the immediate cost of down payment and closing costs. These closing costs are about $5,000. He wants to make a 20% down payment. Seyed's bank will use a maximum TDS ratio of 40% to qualify him for a mortgage. In addition, the posted 5-year mortgage rate is 5.35%, compounded semi-annually. Case Study Questions: 1. List and describe four types of housing the Seyed should consider. 2. Determine the maximum mortgage payment that Seyed would be qualified to pay. 3. What would be the accelerated biweekly payment on his mortgage? 4. At an amortization period of 25 years, what is the maximum mortgage amount that Seyed would be qualified to receive? 5. If Seyed makes a 20% down payment, what is the maximum value of the home that he would be qualified to purchase? 6. Including maintenance, closing costs, and his required down payment, how much money does Seyed need to set aside? Personal Financial Planning Principles - Chapter 7 Mini Case Study: Home Ownership This case study is to develop your skills and abilities to select and purchase a home, calculate the closing cost, monthly costs, mortgage and mortgage repayment amounts. Objectives: After completing this case study activity, you will be able to: Explain the different types of housing available. List the cost associated with purchasing a home. Discuss and calculate the approved maximum mortgage amount and the maximum mortgage repayment amounts given by the financial institution. Instruction: 1. Read the following case study 2. Discuss with your group, the different type of housing, the associated cost in purchasing a home, the approved mortgage and payment amounts given by the financial institution. 3. Discuss and calculate the answers for the Case Study questions listed below. Introduction With a raise from his employer, an investment firm, Seyed Adbullah, 31, is inspired to look for a new home. He has come to you for help. Financially, he is fairly secure, but he is averse to risk. His salary is $93,000 a year, but he does not know how much he should spend on purchasing a home. His current housing expenditures include rent for his apartment of $1,600 per month and tenant's insurance premiums totaling $300 per year. Although he has been paying his rent on a monthly basis, Seyed would prefer the accelerated biweekly payment frequency for his mortgage payments. His month bills include a $500 lease payment for his 2012 Acura MDX and a $300 loan payment. Sayed has research has shown that property taxes and home insurance premiums for the average home in the city in which he lives, are about $2,400 and $450 per year. He is unsure of the maintenance and heating costs, but estimates them at $1,000 and $1,300 per year. Given how busy he is at work, Seyed thinks that a high-end condominium might best suit his lifestyle. The condominium fees associated with the property would be about $400 per month. Seyed wants to own his home, since as the real estate values increase, the value of his home will increase. Local property values have been increasing at 5% per year over the past seven years. One concern about buying a home is the immediate cost of down payment and closing costs. These closing costs are about $5,000. He wants to make a 20% down payment. Seyed's bank will use a maximum TDS ratio of 40% to qualify him for a mortgage. In addition, the posted 5-year mortgage rate is 5.35%, compounded semi-annually