Fannie Mae Foundation: How to Buy a Home

Talk about it

1. Discuss which of the two families might qualify to get a loan.

2. Discuss what the Ramirez family might do to improve their ability to qualify for a loan.

A note on qualifying
Later, in Unit 3, we will discuss the process of qualifying for a loan in more detail. Students will learn about many kinds of loans and special loan programs. Although they may not qualify for a loan with one lender, another lender may find a way for
them to qualify to buy a home. The guidelines in this chapter are merely
a starting point. If a student is close to being able to qualify, based on
the qualifying worksheet, he or she should definitely not be discouraged to shop around for a loan.

Unit 1 : Lesson 4: How much can you afford to borrow?

Talk about it

1. Do you think Tom and Mary Miller will qualify for a $55,000 loan? Why or why not?

Yes. Their “Total monthly housing costs” of $554
in example 1 are below the allowable limit of $770,
and their “Total monthly costs” of $812 are below the
allowable monthly debt limit of $990.

2. Do you think Joe and Teresa Ramirez will qualify for a $50,000 loan? What do you think they could do to improve their chances of getting a loan?

They may not, because their “Total monthly costs”
of $992 are above the $900 allowable debt limit.
They could pay off their credit cards to reduce
their “Total monthly costs” below the limit.

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