Saylor URL: http://www.saylor.org/books Saylor.org
- Different ownership structures include
o conventional ownership,
o condominium,
o cooperative housing.
- The buyer’s inspection checklist includes
o structural elements;
o exterior elements;
o systems for plumbing, electrical, heating/cooling;
o outdoor buildings and features.
- Lenders assess income, current debts, and credit history to determine the creditworthiness of
borrowers.
- A mortgage affordability estimate uses an estimate of PITI and other debt payments as a
percentage of gross monthly income and of the down payment as a percentage of the purchase
price.
- Housing prices may be affected by business cycles as they affect
o unemployment and income levels;
o inflation, which affects not only the cost of houses but also interest rates and the cost of
home financing.
- Housing prices are affected by the availability of home financing, which in turn depends on
o interest rates and inflation,
o liquidity in the credit markets.
EXERCISES
- Perform an attribute analysis of your projected wants and needs as a homeowner. Begin by
prioritizing the following personal and microeconomic factors in terms of their importance to
you in deciding when to buy a home.
o How large should the house be? How many bedrooms and bathrooms?
o Which rooms are most important: kitchen, family room, or home office?
o Do you need parking or a garage?