In This World - Problem of the Day

CNN News Clip

Dorothy and Wes have found the "home of their dreams," and it costs only $240,000. They have never purchased a home before or anything else involving so much money and they are very excited. There seems to be so much to do, and so many new words are being used by the realtor and the banker that they are also confused. If their combined salaries are $39,500 and if the current interest rate is 7.5% APR, how much of a down payment will they need to be able to afford their "dream home," and what is the monthly payment?

In this section, Dorothy and Wes will be introduced to the terminology of buying a house, as well as the steps in negotiating a sales contract and obtaining a mortgage. The CNN video discusses how mortgage rates affect this ability to purchase a home.