Money And Credit Class 10 Assignment Of Mortgage

Life throws all kinds of curve balls. A major event like divorce or an unexpected health crisis can create money difficulties. If your finances have taken a hit, you might not qualify for a home loan. Traditional mortgage loans aren't the only path to home ownership, however. Mortgage assignments and assumptions can help buyers and sellers alike. With a little creative financing, you still might be able to buy -- or sell -- a house.

Assumption Loans

An assumption loan preserves the original mortgage terms while transferring the mortgage note from one person to another. The former owner won't be on the hook for the balance if the new owner defaults. Not all lenders allow assumption loans, but FHA and VA loans are assumable. Assumption can be a good choice in a divorce if the couple had a good interest rate and one spouse wants to retain favorable mortgage terms while releasing the other person from liability.

Due on Sale

Most private mortgages contain a due on sale clause, which allows the lender to demand the entire balance if the loan is sold or transferred. Federal law carves out some exceptions to this rule. Under the Garn-St. Germain Depository Institutions Act of 1982, lenders can't call a loan due in situations like divorce or a transfer to a widow after the death of the other spouse. Even if your loan has a due on sale clause, your bank might still allow a new buyer to assume your loan with the interest adjusted to current rates.

Mortgage Assignment

Mortgage assignments are often confused with another type of transaction called a subject-to agreement or a purchase subject to a mortgage. Simply put, a mortgage assignment occurs when one bank sells a loan to another. This happens relatively often, with investors selling off large groups of mortgages to be serviced by another lender. If your bank assigns your mortgage, it must notify you in writing and let you know where to send your payments.

Subject-to Agreements

If handled properly, a subject-to agreement can be an effective way to buy or sell a house. It is not without pitfalls, however, and should be used carefully. Typically, parties to a sale choose this arrangement when the buyer can't qualify for his own home loan. He takes over the seller's mortgage payments and the seller signs over the deed. If the lender isn't told and later discovers the transaction, it can enforce the due on sale clause. The buyer forfeits the money he has paid into the home, and the seller might be left owing the entire balance.

 

About the Author

A.M. Hill has been a licensed attorney since 2004. Her practice areas include family law and divorce, probate and estate planning and bankruptcy. Hill holds a Juris Doctor from the Cleveland-Marshall College of Law.

Photo Credits

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Are You Teaching Financial Literacy To High School Students?

The teaching curriculum consists of fourteen lesson plans & worksheets designed to augment a semester course in life skills and personal finance management. The Teacher’s Guide, compiled in a separate, easy-to-use notebook, includes an outline of the curriculum:

  • Goals
  • Lesson objectives
  • Suggested resources
  • Teaching notes
  • Chart indicating appropriate age groups for the key learnings offered in each lesson
  • Presentation slides
  • Worksheets
  • Answer keys to worksheets (when necessary)

Introductory Overview to Financial Literacy for High School Students


Lesson One: Making Personal Finance Decisions

Each day, we are faced with many decisions. While most decisions are simple, such as “what should I wear?” or “what should I eat?,” others are more complex, such as “should I buy a new or used car?”  As decision-making skills are used and improved, a person’s quality of life is enhanced. Wiser choices result in better use of time, money, and other resources.  This introductory lesson provides students with an opportunity to learn more about decision-making. The lesson starts with an overview of the decision-making process followed by a discussion of various internal and external factors that affect decisions.

Teacher’s Guide –  Lesson One: Making Decisions

Student Guide – Lesson One: Making Decisions

Teacher’s Slide Presentation – Lesson One: Making Decisions

Teacher’s Power Point Presentation – Lesson One: Making Decisions

Lesson Two: Making Money

Building your career is one of the surest ways to increase income and make money. When planning for the future, one of the most critical financial decisions is determining your career path.  In this lesson, students will be encouraged to consider various topics related to career planning and the financial aspects of employment. This variation of the decision-making process can help a person match personal abilities and interests with appropriate employment opportunities.

Teacher’s Guide – Lesson Two: Making Money

Student Guide – Lesson Two: Making Money

Teacher’s Slide Presentation – Lesson Two: Making Money

Teacher’s Power Point Presentation – Lesson Two: Making Money

Lesson Three: The Art of Budgeting

A personal budget is a financial plan that allocates future income toward expenses, savings, and debt repayment. “Where does the money go?” is a common dilemma faced by many individuals and households when it comes to budgeting and money management.  Effective money management starts with a goal and a step-by-step plan for saving and spending. Financial goals should be realistic, be specific, have a timeframe, and imply an action to be taken. This lesson will encourage students to take the time and effort to develop their own personal financial goals and budget.

Teacher’s Guide – Lesson Three: The Art Of Budgeting

Student Guide – Lesson Three: The Art Of Budgeting

Teacher’s Slide Presentation – Lesson Three: The Art Of Budgeting

Teachers Power Point Presentation – Lesson Three: The Art Of Budgeting

Lesson Four: Living on Your Own

As young people grow up, a common goal is to live on their own. However, the challenges of independent living are often quite different from their expectations. This lesson provides a reality check for students as they investigate the costs associated with moving, obtaining furniture and appliances, and renting an apartment.

Teacher’s Guide – Lesson Four: Living On Your Own

Student Guide  – Lesson Four: Living On Your Own

Teacher’s Slide Presentation – Lesson Four: Living On Your Own

Teacher’s Power Point Presentation – Lesson Four: Living On Your Own

Lesson Five: Buying a Home

For many, buying a home is the single most important financial decision they will make in their lifetime.  However, the process of becoming a first-time homebuyer can be overwhelming, and requires a foundation for basic home-buying knowledge.  This lesson will provide students with information on buying a home and where and how to begin the process. After comparing the differences between renting and buying, students will be introduced to a five-step process for home buying. This framework provides an overview for the activities involved with selecting and purchasing a home.

Teacher’s Guide – Lesson Five: Buying A Home

Student Guide – Lesson Five: Buying A Home

Teacher’s Slide Presentation – Lesson Five: Buying A Home

Teacher’s Power Point Presentation – Lesson Five: Buying A Home

Lesson Six: Banking Services

If the fee for an ATM transaction to withdraw money is $1 and a person withdraws money twice a week, the banking fees for that person will be $104 a year. Over a five-year period, those fees invested at five percent would grow to more than $570.  Most students know that banks and other financial institutions (credit unions, savings and loan associations) offer a variety of services. However, few people know how to make wise choices when using financial services. In this lesson, students will learn about the different types of financial service products available and the features of each.

Teacher’s Guide – Lesson Six: Banking Services

Student Guide – Lesson Six: Banking Services

Teacher’s Slide Presentation – Lesson Six: Banking Services

Teacher’s Power Point Presentation – Lesson Six: Banking Services

Lesson Seven: Credit

In today’s world, credit is integrated into everyday life. From renting a car to reserving an airline ticket or hotel room, credit cards have become a necessary convenience. However, using credit wisely is critical to building a solid credit history and maintaining fiscal fitness. While most students have a general idea about the advantages and disadvantages of credit, this lesson provides an opportunity to discuss these issues in more detail.

Teachers Guide – Lesson Seven: Credit

Student Guide – Lesson Seven: Credit

Teacher’s Slide Presentation – Lesson Seven: Credit

Teacher’s Power Point Presentation – Lesson Seven: Credit

Lesson Eight: Credit Cards

What is APR? What is a grace period? What are transaction fees?  These and other questions will be answered in this lesson as students learn about credit cards, and the different types of cards available and features of each, such as bank cards, store cards, and travel and entertainment cards.

As students start to shop for their first (or next) credit card, this lesson will make them aware of various costs and features. Included in this section is a discussion of the methods for calculating finance charges.  Various federal laws protect our rights as we apply for and use credit cards, such as procedures for disputes and protection from card theft and fraud. In this lesson, students will also be given an opportunity to analyze the information contained on a credit card statement.

Teacher’s Guide – Lesson Eight: Credit Cards

Student Guide – Lesson Eight: Credit Cards

Teacher’s Slide Presentation – Lesson Eight: Credit Cards

Teacher’s Power Point Presentation – Lesson Eight: Credit Cards

Lesson Nine: Cars and Loans

“Should I buy a new car or a used car?”  “Where is the best place to finance my automobile purchase?”  “Is it better to take the rebate or the low-rate financing plan?”  These are typical questions asked by people buying vehicles. In this lesson, students are asked to identify costs associated with owning and operating a motor vehicle. Since these costs are commonly underestimated, guidelines are provided on how much to spend when buying vehicles.

Teacher’s Guide – Lesson Nine: Cars And Loans

Student Guide – Lesson Nine: Cars And Loans

Teacher’s Slide Presentation – Lesson Nine: Cars And Loans

Teacher’s Power Point Presentation – Lesson Nine: Cars And Loans

Lesson Ten: The Influence of Advertising

In today’s modern world, advertising seems to be everywhere we look; online, television, billboards, magazines, newspapers, on buses, grocery carts, even cell phones.  In addition, some forms of advertising can be subliminal, such as the strategically-placed soda can in a movie. We can’t help but be influenced and manipulated as consumers. In this lesson, students will become aware of the various techniques and appeals used to influence consumer behavior.

Teachers Guide – Lesson Ten: The Influence Of Advertising

Student Guide – Lesson Ten: The Influence Of Advertising

Teacher’s Slide Presentation – Lesson Ten: The Influence Of Advertising

Teacher’s Power Point Presentation – Lesson Ten: The Influence Of Advertising

Lesson Eleven: Consumer Awareness

Decisions, decisions. With so many choices available to us, how can we be sure we’re making the right decision?  Wise consumer buying starts with a plan. Using a systematic purchasing strategy will provide students with an ability to make more effective purchases. Comparative shopping techniques will be discussed to encourage students to carefully consider price, product attributes, warranties, and store policies. Next, this lesson covers a variety of buying methods, such as buying clubs, shopping by phone, catalogs, online, and door-to-door selling.

Teacher’s Guide – Lesson Eleven: Consumer Awareness

Student Guide – Lesson Eleven: Consumer Awareness

Teacher’s Slide Presentation – Lesson Eleven: Consumer Awareness

Teacher’s Power Point Presentation – Lesson Eleven: Consumer Awareness

Lesson Twelve: Saving and Investing

Saving just 35 cents a day will result in more than $125 in a year. Small amounts saved and invested can easily grow into larger sums. However, a person must start to save.  This lesson provides students with a basic knowledge of saving and investing. The process starts with setting financial goals. Next, a commitment to saving is discussed.

Teacher’s Guide – Lesson Twelve: Saving And Investing

Student Guide – Lesson Twelve: Saving And Investing

Teacher’s Slide Presentation – Lesson Twelve: Saving And Investing

Teacher’s Power Point Presentation – Lesson Twelve: Saving And Investing

Lesson Thirteen: In Trouble

The material in this lesson will help students become aware of the warning signs of financial difficulties. This lesson includes information on where to go for debt consolidation help and for nonprofit credit counseling.

Teacher’s Guide – Lesson Thirteen: In Trouble

Student Guide – Lesson Thirteen: In Trouble

Teacher’s Slide Presentation – Lesson Thirteen: In Trouble

Teacher’s Power Point Presentation – Lesson Thirteen: In Trouble

Lesson Fourteen: Consumer Privacy

In today’s information age, keeping your personal financial information private can be challenging. What you put on an application for a loan, your payment history, where you make purchases, and your account balances are but a few of the financial records that can be sold to third parties and other organizations.  This lesson, with attached budgeting activities, will encourage high school students to take the time and effort to develop their own personal financial goals and spending behaviors.

Teacher’s Guide – Lesson Fourteen: Consumer Privacy

Student Guide – Lesson Fourteen: Consumer Privacy

Teacher’s Slide Presentation – Lesson Fourteen: Consumer Privacy

Teacher’s Power Point Presentation – Lesson Fourteen: Consumer Privacy

Supplementary Resources

In an effort to give you the most up-to-date information for teaching and making personal financial decisions, we’ve compiled the following lists of periodicals and organizations that can enhance your use of Practical Money Skills for Life.

More Resources for Students: The Cost of College 

The cost to attend college has soared faster than almost any segment of the economy over the last 30 years. The average cost for students attending a public university is up 213% ($3,190 in 1988 to $9,970 in 2018), while private school is up 129% ($15,160 to $34,740) over the same time period.

That’s the primary reason Americans are $1.4 trillion in debt on student loans.

The good news is that are hundreds of online sites offering tips on not just what it will cost, but what you can do to pay for it. So, take a deep breath and check out these sites that should help you find a college you can afford to attend.

  • www.collegedata.com: This is a wonderful resource for everything from cost factors to how to apply to how to pay your own way.
  • www.trends.collegeboard.org: They specialize in providing historical data on college pricing, financial aid and what your degree will be worth when you graduate.
  • https://studentaid.ed.gov/sa/prepare-for-college/choosing-schools/consider/costs: This is the site for the Department of Education, which provides approximately 67% of college financial aid. You will find detailed evaluation of costs and financial aid here.
  • www.fastweb.com: Lots of advice on how to get through the financial aid process along with stories about why you should – or should not – consider certain schools.
  • https://www.aie.org/: This site offers answers on the cost of college, how to finance it and even how to manage money while you’re there.
  • https://nces.ed.gov/: This is a government site that collects and analyzes date from every college and provides accurate data on average cost of attendance.
  • www.mykidscollegechoice.com: Very focused on finding a college you can afford and ways to pay for it.
  • www.collegecountdown.com: Asks and answers questions about actual costs of college, school that fit you financially and how to evaluate offers you receive from colleges.

Other Resources for Teachers

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