Financing a Home

Find a home: To begin, find a home that is currently listed for sale. One of my favorite sites is because of the search attributes and the currency of the information (I am in no way affiliated with the company). Feel free to use any site that has current listings. If you find a home for sale in your area and you want to use a flier, you will need to be able to scan the flier to send with your project. When you’re searching, it will be more practical to find a home that you would have intentions to purchase in the future. You may want to limit your search to moderate sized homes or condos if you are searching in Orange County.

Get a loan: Choose a loan from OCTFCU at This site also offers information on Mello Roos and other mortgage terms if you need a little more explanation.

Now you’re ready to start! Your report will contain the following:

  1. A detailed description of the home including: the address with city and zip code, and a list of amenities (number of bedrooms and bathrooms, air conditioning, in-ground sprinklers, etc.). Be sure to include the flier or the URL that shows the house is currently listed for sale.
  1. Loan calculations that include the following:
  2. Initial investment: down payment and closing costs. (Use a 3% down payment and the closing costs determined by the points in your loan)
  3. Total monthly payment. To find the total monthly payment, add the following monthly payments: monthly mortgage, property taxes, insurance, and Mello-Roos.
  4. Monthly mortgage: Calculate as indicated in the textbook/homework using your loan percentage rate.
  5. Property taxes: Go to to determine the yearly sales tax due. For the calculation, take this percentage of your purchase price (for the yearly cost), then divide it by 12 to determine how much is due monthly.
  6. Association dues: If this is not indicated in the listing, it will take a call into the realtor. This is a flat fee that pays for the community park, pool, landscaping, etc.
  7. Mello-Roos: This will also take a call into the realtor if it is not indicated in the listing. For a short summary of what this fee is, visit
  1. Total cost over the life of the loan.
  1. For extra credit, determine what your home would be worth when it will be paid off (assuming inflation continues at the same rate over the next 30 years as it has over the past 30 years. Indicate this real estate inflation with your source.).
  1. Determine how much your household would need to make annually to be approved for this home. Use the same rules as those in the textbook/homework.
  1. One paragraph summarizing what you learned and how this has affected your view of purchasing real estate. Consider salary rates from

In addition to the components above, your report will be graded on the following:

  1. Organization. Follow the outline above for the components of the report. Make a table that lists the monthly cost of each item in #2 above, then clearly show the total.
  2. Clarity of calculations. (You may use technology/websites to check your work, but you must show your own calculations.)