Buying a House with a Mortgage

1. A homeowner's mortgage is a long term loan in which the property is pledged as security for payment of the difference between the down payment and the sales price.
2. There are various types of mortgages.
   • We will focus on conventional, fixed rate mortgages.
3. Points are pre-paid interest.
   • You can lower your interest rate by paying points.
   • 1 point is 1% of the amount financed.
4. The gross monthly income is the income before any deductions.
5. The adjusted monthly income is the income minus any debts with more than 10 payments remaining.
6. We will use a different table to compute mortgages
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7. Do some problems 7-18 on page 615