I need some assistance with my two assignments I am really going crazy over here trying to figure this out.

University of Phoenix Material

Credit History Worksheet

Credit Scores

Go to the Fair Isaac Co. website: www.myfico.com. (Do not buy a credit score unless you choose to do so.) For this activity, go to "Learn about scores." Review this page, and follow the link to "What's in your score?" From this page, follow the links to learn more about credit scores.

Note: You do not have to share your personal credit score or other details in this worksheet.

Using what you have learned about credit scores, respond to each of the following questions in a minimum of 50 words:

1.What is a credit score? When and why is a credit score important?

2.What are the top two factors in your FICO score? What actions can one take to earn the most points in these categories to improve a FICO score?

3.Your credit score can impact how much you pay on credit you use throughout your life. Enter the four fields into this calculator to estimate how much more you might pay over time. First, try it with your current estimated credit score; then, move the slider to see how much less you would pay with a higher score, and then how much more you would pay with a lower score.

Current Estimated Score Range

Higher Score Range

Lower Score Range

Enter the total cost of credit for each range

4.In at least 50 words, how would you summarize the results of the Credit.com calculator?

Credit Reports

Go to www.annualcreditreport.com, the only site authorized by the Federal Trade Commission to provide free consumer credit reports. Request one free credit report from one of the three credit reporting agencies (if you are unable to download a report, complete this activity using a sample credit report from www.experian.com).

Using what you have learned about credits reports, respond to each of the following questions in a minimum of 50 words:

1.What type of information is included on a credit report?

2.How long might negative credit history, such as a 60-day delinquency, remain on your credit report? If any negative history is incorrect, what steps would you take to correct the error?

3.What did you find surprising about credit reports?

Homes: Renting and Buying Worksheet

1.Complete the "Buy or Rent Your Next Home" exercise on the Bankrate website: http://www.bankrate.com/calculators/mortgages/rent-or-buy-home.aspx

Respond to each of the following in a minimum of 50 words:

• What was the recommendation?
• What were the factors that led to that recommendation?
• Do you agree or disagree with the recommendation? Why?

2.Considerhoweconomic conditions affect your decision to buy or rent (for example interest rates, unemployment rate, and inflation).

Explain in a minimum of 100 words the main benefits and drawbacks of renting versus owning a home.

3.Review Exhibit 7-4 in Ch. 7, page 225 of Focus on Personal Finance.

Summarize in at least 100 words the steps in the home-buying process.

4.Review Exhibit 7-6 in Ch. 7, page 230 of Focus on Personal Finance.

Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. Show your calculations in the table below.

Monthly gross income: $2,950

Other Debt, monthly payment: $160

Down payment to be made: 15% of purchase price

Monthly property tax and insurance: $210

30-year mortgage at 6%

Enter your calculation and response in this column.

Step 1. Start with the monthly gross income.

$2,950

Step 2. Multiply Step 1 by .33 (which is the decimal form of 33%) for a PITI (principal, interest, taxes, and insurance) guideline.

Step 3. Subtract "Other Debt" payments from the result of Step 2 to determine the Affordable Monthly Mortgage Payment.

Step 4. Divide the result of Step 3 by 6.00 (this is the mortgage payment factor from Exhibit 7-7 based on a 30-year loan at 6%) and then multiply this by $1,000.

This is the Affordable Mortgage Amount.

Note: Does this amount seem reasonable for this scenario? If not, double-check your calculations.

Step 5. Divide the affordable mortgage amount by .85 (This is 1 minus the down payment percentage) to determine the Affordable Home Purchase.

Note: Does this amount seem reasonable for this scenario? If not, double-check your calculations.

5.If you were buying a home valued at $215,000, what is the minimum down payment you would need in order to avoid paying private mortgage insurance (PMI)? PMI is requested to protect the lender from potential default loss when there is insufficient equity in a home.

6.Debt payments-to-income ratios will likely be considered as you apply for a mortgage. The Focus on Personal Finance text suggests keeping this ratio below 20%. A mortgage lender will have their own ratio for all debt payments, including mortgage-to-income ratio, before they will consider approval. Using this information, answer the questions and show your calculations in the table below:

Net monthly income: $4,000

Expected full mortgage payment (PITI): $1,000

Student loan payment: $250

Car payment: $300

Enter your calculation and response in this column.

What is this person's debt payments-to-income ratio?

What is this person's debt payments-to-income ratio when the full mortgage payment is included?

If the mortgage lender required total payment to income ratio below 40%, would this person meet that standard?