1. finance
2. personal finance
3. insurance

Name____________________________________
Consumer Math
Ch 10 Notes Packet: Housing
Intro: Landlord/ Tenant Law
1. Why is Landlord Tenant law important?
2. Define the following:
Tenant:
Landlord:
Rent:
3. What in included in good tenant screening?
4. What legal reasons can a landlord use to refuse rental?
5. What reasons are illegal for a landlord to refuse rental?
6. What is:
a. A lease?
b. A month to month rental agreement?
c. A security deposit?
7. List a 4+ things you should expect in a rental agreement?
8. What provisions are illegal in a rental agreement?
9. What are 4+ maintenance responsibilities of the landlord?
10. What are 3+ maintenance responsibilities of a tenant?
11. List 3+ additional responsibilities of a tenant?
12. What is renters insurance and why is it important?
13. Explain 3+ concerns that may need to be addressed if you want to add a roommate?
14. When does the landlord have the legal right to enter? What kind, if any, of notice must be given? Do you
have the right to refuse?
15. How much time should you give your landlord for the following repairs:
a. Hot/Cold water, heat, electricity, or other hazardous life-threatening conditions?
b. Refrigerator, range, oven, or major plumbing problems?
c. All other repairs?
16. If your landlord won’t fix your problem, what options do you have?
17. When can you be evicted?
18. What are some illegal landlord actions?
19. When can a tenant break the lease?
20. What are the tenant’s responsibilities?
21. When can a landlord break the lease?
22. What do you have to do when you move out?
23. How can you protect yourself?
24. What resource do you have available in Michigan that may help you understand Tenant Landlord Law
further?
Section 10.1-2: Mortgage Loans, Monthly Payments and Total Interest
_______________________legal contract that describes terms of the loan obtained to buy a piece of property
 ________________________if a person doesn’t meet the terms of the mortgage, the lender can
take the property and sell it to get money back
 Mortgage payment is a combination of principal + interest
 First twenty years is more interest than principal
 Several different types of mortgage
 Most lenders require a 20% down
____________________________- interest rate does not change
 Term can be 15, 20, 30 years
 Mortgages with shorter terms have lower interest rates but require a higher income
____________________________ - interest rate changes at predetermined intervals
 Introductory interest rates are 1.5% to 2% lower than prevailing market rates
 Fixed interest rates between 6 months and 5 years
 Can increase by 2% points
 Lifetime cap of 6% points
_____________________________ - lower interest rates but the term is only for 5 to 7 years
 At the end of the 5 to 7 years whole balance is due
 Pay it off or refinance (take out another mortgage) at the rates that are in effect at that time
Know the annual interest rate, amount of the loan, and the length of the loan, you can use a table to find the
monthly payment, the total amount paid, and the interest charge.
Mortgage Loan Amount =___________________________ - _________________________
Monthly payment =____________________________ x ____________________________
Amount paid =____________________________ x _______________________________
Total Interest Charged =__________________________ - __________________________
Example: Kim would like to buy a house for $150,000. The bank is willing to finance the purchase as long as
Kim can make a down payment of 20%.
a. What is the amount of the mortgage loan?
b. Kim is deciding between a 20-year mortgage at 7% or 30-year mortgage at 7%. Which loan is
cheaper? How much will Kim save?
Process:
What is the monthly payment of each loan?
20 years
30 years
What is the total amount paid for each loan?
20 years
30 years
What is the total interest for each loan?
20 years
30 years
Monthly payment for a $1000 loan
Amount
Length of Loan
interest rate
20
25
5.00%
$ 6.60
$5.85
5.50%
6.88
6.14
6.00%
7.16
6.44
6.50%
7.46
6.75
7.00%
7.75
7.07
7.50%
8.06
7.39
8.00%
8.36
7.72
8.50%
8.68
8.05
30
$5.37
5.68
6.00
6.32
6.65
6.99
7.34
7.69
Section 10.3: Closing Costs
______________________________-fees for services required to transfer ownership of the property from one
person to another.




Include fees your lender charges for lawyers, credit checks, and title searches, taxes, and
preparations of the documents.
Title Search-investigation to see if legal right to ownership of the property is clear.
o Reveals whether the property has any ________________ (claims against the property for
debt)
o A person who buys property with a lien must pay the_______________________ (those
who are owed money)
Due with your down payment at the time you sign the documents to transfer ownership of your
new house.
Range anywhere from $1000 - $5000
Closing Costs = ________________________________________
Ex 1 Barry and Ella have agreed to purchase a house for $96,500. Kenmore Savings and Loan Associations is
willing to lend the money at 12.25% for 25 years provided they can make a $10,000 down payment. The total
closing cost is 3.25% of the amount of the mortgage loan. What is their closing cost?
Ex2 Marla and Glen have been granted an $180,000 mortgage loan. When they sign the papers to purchase
their new home, they will have to pay the closing costs shown. What is the total of the closing costs?
Credit Report
$44.00
Appraisal Report
$340.00
Title Search
$184.00
Survey
$260.00
Recording and Transfer fee
$96.00
Legal fee
$288.00
Loan Origination fee
2% of Mortgage
Section 10.4: Real Estate Taxes
When you own a home you have to pay city or county ______________________________________

Money used to operate and maintain roads, parks, schools, government offices, and other public
entities

The amount of real estate taxes paid in one year depends on the _____________________
________________ of your property and the _____________________________________

_______________________________-price at which the house can be bought or sold

Tax rate may be expressed in mills per dollar of valuation

A _________ is $0.001
Assessed Value= _________________________________ x ______________________________
Real Estate Tax= _________________________ x __________________________________
Ex1 The Ottawa tax assessor stated that the market value of the Courtland Farm is $340,000. The rate of
assessment in Ottawa County is 40% of the market value. The tax rate is 84.32 mills. What is the real estate tax
on the Courtland Farm?
Ex 2 Jose and Trudy own a home that has a market value of $675,000. They live in an area where the rate of
assessment is 45% and the tax rate is 48.535 mills. What is the annual real estate tax?
Section 10.6 - 7: Home Owners Insurance and Premiums
Homeowner’s insurance includes two basic types of protection:
1. ________________________________ pays for losses to the home and other property
 Covers damages caused by fire, windstorm, lighting, explosions, riots, aircraft, vehicles, vandalism,
and theft
 Must pay extra for flood and earthquake insurance.
2. ________________________________ covers bodily injury to others, damage to property of others,
and medical payments to a person injured on your property.
 For example, you would be protected if someone fell and was injured on a damaged sidewalk in
front of your house.
The coverage in most policies is for the dwelling itself and the contents in the dwelling. Policies make a
distinction between personal property and real property.

________________________________ includes furniture, clothing, appliances, and anything else
contained in dwelling.

________________________________ includes physical structures that are attached to the land,
such as a home, garage, and fences
Should be insured at least 80% of replacement cost in order to be fully paid at the time of a loss

Furniture, appliances, and other personal property in the home are usually insured for actual cash value.
 If your five year old TV burns, the insurance company will give you the price it is worth today, not
the original cost.

Some companies do offer ________________________________ pay the insured amount needed
to replace property destroyed or damaged.

________________________________ names each item and gives its value and “floats” wherever
property goes.
o Provides coverage for full value of the property
o No deductible

________________________________ - covers the cost of living away from home while the
damage is being repaired.
Amount of Coverage=__________________________________x________________________
Ex1 The replacement value of Joy and Ron’s home is estimated at
$94,000. They have insured their home for 80% of its replacement
value. According to the guidelines below, what is the amount of
coverage on the following?
a. Personal Property
Percent of
Coverage
50%
Coverage
Personal Property
Loss of use
Garage and other
Structures
20%
10%
b. Loss of Use
c. Garage and Other structures
____________________ how much you pay for home insurance
 Depends on amount of insurance
 Location of the property
 Type of construction of the home
_________________________________ number reflecting the quality of fire protection available in your area
Ex2 The replacement value of Marcia’s home is $150,000. She has insured her home for 80% of its
replacement value. The home is of wood-frame construction and has been rated in fire protection class 4.
What is her annual premium?
Annual Premiums for a typical homeowner’s policy
Amount of insurance
Brick/Masonry Veneer
coverage
Fire protection class
1-6
7-8
9
40,000
128
131
173
45,000
133
137
173
50,000
137
141
185
60,000
147
151
199
70,000
164
166
219
80,000
185
191
252
90,000
206
212
281
100,000
229
236
313
120,000
272
280
372
150,000
353
362
481
200,000
474
487
647
250,000
567
580
739
300,000
676
693
882
400,000
785
804
1024
500,000
1007 1031
1313
10
182
182
195
210
230
264
295
328
391
505
680
785
937
1087
1394
11
208
208
223
241
264
303
339
377
449
581
782
898
1072
1244
1595
Wood Frame
Fire protection class
1-6
7-8
9
137
141
182
144
147
191
146
150
195
158
162
210
173
178
230
198
204
264
222
228
295
146
253
328
293
301
391
379
389
505
509
523
650
600
614
785
716
733
937
831
850
1087
1065
1091
1394
10
191
200
204
221
242
279
310
345
411
532
716
835
996
1157
1484
11
219
229
234
252
277
319
357
396
472
611
823
956
1141
1325
1699
Section 10.8: Other Housing Costs
In addition to your monthly mortgage payment, real estate taxes, and insurance payment, you’ll have
expenses for utilities, maintenance, and home improvements.

____________________________: charges for electricity, gas, water, telephone, and heating fuel.

Federal Housing Administration recommends that your monthly housing costs be
________________________of your monthly net pay.
Ex 1 Sue and Paul have a combined monthly take-home pay of $3,320. The list of expenses for May is shown.
Were their housing costs for May within the FHA guidelines?
Mortgage payment
Insurance
$698.24
25.25
Real Estate Tax
Electricity
157.08
65.90
Telephone services
Heat
36.18
54.20
Water
Loan payment
26.20
50.00
Repair storm door
Cable
38.68
39.95
Cell phone
29.95
Ex 2 Dan has a monthly take-home pay of $4100. The list of expenses for April is shown. Were his housing
costs for April within the FHA guidelines?
Mortgage payment
Insurance
$328.65
18.50
Real Estate Tax
Electricity
159.00
55.44
Telephone services
Loan payment
44.98
50.00