This will give you a feel for some of the major financial components in a home purchase. (The termhomeincludes houses, apartments, house trailers, condos, etc.)

To buy a house, presume that you need to have a 20% down payment.

You cannot buy a house until you have saved (or have been given) 20% of the purchase price.

[In other words, you cannot borrow the down payment.]

You will also need a bit more for the cost of the loan application, loan costs, inspection costs, and closing costs; you should plan on another $5,000.

Let's assign an income, a savings rate, and an interest rate for your loan.

If your birthday is October through December, your salary is $130,000.

If your birthday is July through September, it is $70,000.

If your birthday is April through June, it is $45,000; finally, if your birthday falls from January through March, then your salary is $25,000.

If your income is over $70,000, your savings rate will be 10% of your salary for three years.

Otherwise, the savings rate is whatever you think is realistic for you given your debts, cost of living, and income.

If your birthday is in January through March, then someone in your family has opened up a "Roth IRA" for you which will give you $10,000 more dollars for your down payment on your first home.

Expect the interest rate to be around 4.25 % for a thirty-year mortgage. (Note: If you can find a lower rate, feel free to use it. For students who qualify for a military veteran rate, feel free to use it.)

If you are fortunate enough to have a birthday in October through December, then you may also presume that a friend or a relative will be able to loan you three-quarters of the down payment for a home.

You will decide your marital status. (Your spouse, however, maynothave an income that is higher than yours).

You choose a price range, a house, and a neighborhood. You need to have enough money not only for the mortgage, but for additional bank fees for the loan application ($400), a fee for giving you a loan, a fee to search city records to make sure that there are not any liens against the property (i.e., a title search), and other "closing costs."

You can estimate all that as about 6% of the cost of your loan.

[Remember, there are differences in loans. If you take a 15-year loan, then your mortgage will be higher, but you will pay less in interest rates over the course of the loan. The 30-year loan is standard.] Interest rates are "fixed" which means that they stay the same over the course of the loan or "adjustable" which means that they start low and then can go significantly higher.

(You can go to www.hud.gov for more information or also do a search using the word "mortgage" or "home buying" and check one of hundreds of sites on the web. Many of these take you through the steps.)

Look for houses online. Find a sample house in arealneighborhood and price range. It may be anywhere in the country. You should decide on what kind of house you can afford.List the address of the house you would like to buy along with the cost of the house and a brief description of it (i.e., number of bedrooms, bathrooms, and square footage). Provide the URL (link) to the house.

If you can't afford a house, choose the house you wouldliketo buy and simply figure out how old you will be before you can buy it.

Fill out the information below.

Buying a House

1) Spouse? (no/yes; if yes, provide the salary amount) $__________NO__________

2) Your salary: $____________________________

3)URLto the house (use Zillow, etc.): _________________________________________

4) house price: ____________________________________

5) your down payment amount: $___________________________

6) Approximate monthly payment: $____________________

7) Interest rate: _______________%

8) So...are you even able to buy the house you want? If not, how old will you be when you can afford to buy it (based on the money situation revealed above)? ______ (Answer with eitheryesor the approximate age...)

9) How does the system of home buying giveadvantagesfor those born into higher socioeconomic circumstances?