Fannie Mae Foundation: How to Buy a Home

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Assign learners to groups and have them read about Mohammad Zayed and look at his loan application worksheet on this page. Explain that Mohammad has completed the worksheet himself to prepare for his meeting with the mortgage lender. Have learners answer the questions on this page with their groups. Ask groups to report their answers to the class.

To answer question 5, remind learners to consider Mohammad’s monthly income, monthly expenditures, and outstanding debts.

The information under
Bank Accounts will help learners answer question
1; and Credit Cards and Loan Information will help with question 2.

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

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Mohammad Zayed

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.

Mohammad's loan application worksheet

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