Tiny House Living-Is it for you?

Tiny houses (usually 400 square feet or less) have become popular with many people, as they offer these benefits:

  • quick access to a comfortable home with probably no mortgage payments.
  • you can learn from your home-building mistakes if you decide to build a larger home.
  • lower home ownership costs with the possibility of living off-grid.
  • an environmentally-friendly design with little or no toxins.
  • a simpler, less cluttered life with creative ideas to effectively use space.
  • potential for better communication with family members as a result of close quarters.

However, common drawbacks of buying and living in a tiny house include:

  • limited privacy, no place for solitude.
  • limited living space; little room for entertaining guests and family.
  • limited kitchen and storage space.
  • more trips to the store-no buying in bulk, and usually driving further to stores.
  • tiny houses may be on wheels or on a foundation, restrictions may exist as to where you may park or build.

For additional information on tiny houses:

Link #1

Link #2

Teaching Suggestions

  • Have students search for online videos about tiny house living to obtain additional information on benefits and drawbacks.
  • Have students design a tiny house that would fit their life situation.

Discussion Questions 

  1. What personal factors should be considered when building a tiny house?
  2. Describe life situations of people who might be appropriate for tiny house living.

How to Get the Best Mortgage Rate

“Finding the right mortgage (and how to get the best mortgage rate can be a confusing process–especially for first time home-buyers.”

Buying a home is a huge financial commitment.  In this article, Deborah Kearns discusses the following six questions that can help you decide which is the right mortgage for you.

  1. Should I get a fixed- or adjustable-rate mortgage?
  2. Should I pay for points?
  3. How much should I expect to pay in closing costs?
  4. Do I qualify for any special programs?
  5. How much can and should I put down?
  6. Any other insights on how to get the best mortgage rate?

Each question provides detailed information to help you answer the question and find the right home mortgage financing needed to purchase the home of your dreams.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Help students understand the importance of purchasing a home they can afford after all other home ownership costs–taxes, utilities, repairs, etc. are considered.
  • Stress the necessity of “shopping” for a home mortgage and comparing both term of the mortgage and the effect of interest rates on total financing costs.

Discussion Questions

  1. What factors affect the cost of financing a home that you would like to purchase?
  2. How important is good credit when purchasing a home? Does it really make a difference if you have a good credit score or a bad credit score?  Explain your answer.
  3. What steps can you take to make sure that you are getting the lowest interest rate when you finance your home?

Home Mortgage Calculator

“Finally, simple mortgage calculators that anyone can use.”

The mortgage calculators on this website can help home buyers estimate how much their monthly payments will be when they purchase a home.  To use the calculator, enter the following information and then click “Calculate.”  It’s that simple.

  • Home Value
  • Loan Amount
  • Interest Rate
  • Loan Start Date
  • A Percentage for Property Tax
  • A Percentage for Private Mortgage Insurance

In addition, there is information to help homebuyers compare a 30-year and a 15-year mortgage, make a rent or buy decision, and valuable information about other home purchase decisions.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the importance of finding the right mortgage when purchasing a home.
  • Calculate monthly home mortgage payments when different interest rates are chosen.
  • Illustrate the difference for the total repayment amount and monthly payment amount when the home buyer chooses a 15 year or 30 year mortgage.

Discussion Questions

  1. How important is choosing the right mortgage when you buy a home?
  2. Using the mortgage calculator at http://www.mortgagecalculator.org, determine the monthly payment for a 30-year loan for $180,000 if the interest rate is 5 percent. Assume the home purchase price is $210,000, property tax is 1.5 percent, and the PMI is 0.5 percent.
  3. What is the monthly payment for the above loan if the interest rate decreases to 4 percent? Over the 30-year period, how much did you save if the interest rate is 4 percent compared to 5 percent?

Mortgage Calculator

“A house is the largest purchase most of us will ever make so it’s important to calculate what your mortgage payment will be and how much you can afford.” 

While technically not the usual article you expect to read on the Kapoor Money Minute blog, the information about this Bankrate mortgage calculator can help you determine how much your monthly home mortgage payment will be.  To use the calculator, you simply input the requested financial information in the boxes provided and the calculator will determine your monthly mortgage payment.  You can also access an amortization table that shows how much of each payment is for interest and how is used to reduce the unpaid balance on your home mortgage.

In addition to this calculator, the Bankrate.com site provides additional calculators and information on many personal financial topics.  Take a look and be surprised at the amount of useful information available on this site.

 For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Use the calculator to help students determine how much house they can afford.
  • Discuss other expenses that could increase the cost of home ownership.

Discussion Questions

  1. Take a look at the information that you must enter in order to use the mortgage calculator described in this article.  How do the amount of the mortgage, interest rate, and term of loan impact the monthly payment for your home mortgage?
  2. In addition to your monthly home mortgage payment, what other costs can you expect when you buy a home?
  3. Buying a home is a “big” financial decision. Are there additional factors besides mortgage payment and other home ownership expenses that you should consider before making a decision to buy a home?

Mortgage Comparison Calculator

Many home buyers do not shop around for a mortgage. Failing to comparison shop for a mortgage often means higher monthly payments and paying thousands of dollars more in interest over the life of the loan.  A recent survey of mortgage borrowers revealed that:

  • Nearly half of borrowers only consider one lender or broker before applying for a mortgage.
  • Over three-fourths of borrowers only apply to one lender.
  • Lenders and brokers were the most common mortgage information source; with real estate agent also used. Other source of information were websites, financial and housing counselors, friends, relatives and coworkers.

Home buyers should complete an application with multiple lenders or brokers in an effort to get a better deal.  Also, ask questions and take actions to help you find the best mortgage for you

For additional information on comparing mortgage rates, click here:

For the complete report on study, click here:

A mortgage comparison calculator is available, click here:

Teaching Suggestions

  • Have students interview people who own homes to obtain information about the mortgage process they used.
  • Have students prepare a data summary of mortgage rates for different lenders in their area.

Discussion Questions 

  1. What actions can be taken to reduce mortgage costs?
  2. Describe factors that a person should consider when choosing among several mortgage lenders.

The Seven Baby Steps (Dave Ramsey)

“Get out of debt the same way you learned to walk–one step at a time.”

This article describes Dave Ramsey’s seven steps that anyone can take to get out of debt and begin to manage their personal finances.  These seven basic principles have been taught by Mr. Ramsey via radio, books, Financial Peace University, live events, and online.  Listed below are the seven steps discussed in this article.  Note:  You can get more information about each step by clicking on the “Learn More” tab.

  1. Begin by creating a $1,000 emergency fund.
  2. Pay off all debt using the debt snowball .
  3. Save 3 to 6 months of expenses in a savings account.
  4. Invest 15 percent of household income into Roth IRAs and pre-tax retirement accounts.
  5. Create a college funding plan for your children.
  6. Pay off your home mortgage early.
  7. Build wealth and give.

For more information, click here

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Ask students visit the Dave Ramsey website.
  • Discuss some or all of the seven baby steps described in this article. Reminder:  Students can get more information by clicking on the “Learn More” tab.

Discussion Questions

  1. How can the seven baby steps help you manage your personal finances?
  2. Do the steps in this article make you want to change your priorities and what’s important in your life? Justify your answer.

Mistakes of Homebuyers

An increasing number of homebuyers are coming into the market. However, along with that trend, is an increasing number of financial regrets due to mistakes such as:

  •  considering that renting may still be a viable financial choice in some situations; for example, if you may be moving due to a job or other circumstances.
  • with rising housing prices and higher mortgage rates, some buyers may not be competitive when bidding on a property.
  • other debts (such as a high car loan) may limit the monthly payment a person can afford.
  • putting too much faith in online property prices, which can give a false sense of true home values.
  • skipping the home inspection can result in not being aware of subtle home defects.
  • unrealistic expectations of the future appreciation of the home.

For additional information on mistakes made by homebuyers go to:

http://www.cnbc.com/id/101837611

Teaching Suggestions

  • Have students research suggestions for avoiding home buying mistakes.
  • Ask students create an in-class presentation with suggestions for avoiding home buying mistakes.

 Discussion Questions 

  1. What actions might be taken to avoid these home buying mistakes?
  2. Describe other difficult situations that a person might encounter in process of buying a home.