Standard #: MA.912.F.3.14 (Archived Standard)


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Compare the total cost for a set purchase price using a fixed rate, adjustable rate, and a balloon mortgage.


Remarks


Example: Find the total cost for a $225,000 mortgage for the following options:

a) 30 year fixed rate mortgage with a rate of 6.35 %
b) 3/1 ARM with a rate of 6.75% with a maximum adjustment of 2 points per year with a cap of 6 points for 30 years c) 10 year balloon mortgage with a 30 year amortization schedule with a rate of 5.5%

Next describe the benefits and detriments of each mortgage option.

General Information

Subject Area: X-Mathematics (former standards - 2008)
Grade: 912
Body of Knowledge: Financial Literacy
Standard: Loans and Financing - Become familiar with and describe the advantages and disadvantages of short-term purchases, long-term purchases, and mortgages.
Date Adopted or Revised: 09/07
Content Complexity Rating: Level 2: Basic Application of Skills & Concepts - More Information
Date of Last Rating: 06/07
Status: State Board Approved - Archived

Related Courses

Course Number1111 Course Title222
1200500: Advanced Algebra with Financial Applications (Specifically in versions: 2014 - 2015 (course terminated))
7921022: Access Economics with Financial Literacy (Specifically in versions: 2014 - 2015, 2015 - 2018, 2018 - 2023, 2023 and beyond (current))


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