Unit 3 : Lesson 1: What you should know about mortgage loans

Talk about it!

Mohammad Zayed wants to buy a town house for $58,000. He has saved some money, but he will need a loan. He has an appointment to meet with a lender at his bank. He has already completed the following application worksheet because he knows the lender will ask for this information.

Read Mohammad’s loan application worksheet below and discuss these questions with your classmates. Report your group’s answers to the class.

1. How much money does Mohammad have in his bank accounts?

2. How much is Mohammad’s total debt?

3. If the loan requires a minimum down payment of 5 percent, how much will Mohammad’s down payment be?

4. Mohammad plans to make a $3,000 down payment and borrow $55,000 over 30 years at 8 percent interest. How much will his monthly mortgage payments be? Refer to the Monthly Payment chart by clicking here.

5. In your opinion, will Mohammad be able to repay this loan? Explain your answer.

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