Case Studies, Ch 12 - These are case studies that are mandatory to complete. PDF

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These are case studies that are mandatory to complete....

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Cheyenne Francis Professor Kevin Bradford Personal Finance 26 April 2017 Case Studies, Chapter 12 Jennifer and Chase 1. Jennifer and chase has a couple of options at this point. If they feel like they need to have a credit score, they can borrow some money and give it enough time so they can achieve a decent score. They could also provide documentation of their payment history to the mortgage company. 2. I would tell them to provide their payment history to the mortgage company. These expenses could be their rent, utilities, phone bills, and car insurance. This way they will not be going in to any debt trying to get a credit score just to get a mortgage. 3. They are a safer risk because they have managed their money so well that they have never needed to borrow anything and if they have borrowed any money, they have paid it off in full. This should show the bank that they will continue to do this with their mortgage. Terell and Sheree 1. It is possible that since they are having to get another loan for the down payment that they could end up with more than they can pay for. If they do this, they will more than likely find themselves not paying on either of the loans and that could result in losing their house. 2. It is not a good idea. If something happens and Sheree does not pay the loan, it could cause problems between her and her dad.

3. No, a 30-year fixed-rate loan is not a good idea. With a 30 year loan, they will end up paying thousands more in interest than they would with a 15 year loan. 4. If I were in their situation I would be patient. I would save up the 10% down payment and then get a 15-year fixed-rate loan. Derrick’s Mortgage Options 1. Yes, the conventional loan is a better option. Since this type of loan is not guaranteed by the government, the interest rates are better. It is also usually a fixed loan, which is the best option. 2. No, he should not take advantage of the balloon loan. It may be a smaller payment at first but it will them jump to $300 over the $1,000 he says he has to cover the payment. 3. One option is the accelerated loan. Another option would be a 15-year fixed-rate mortgage. 4. I would tell Derrick to go with a conventional, 15-year fixed-rate mortgage. This way, he will not have to worry about the rate going up and with it being 15 years he will pay a lot less in interest....