Nov 21, 2016
Chart of the Week, Credit Scores, Mortgages, Activity, Question of the Day, Research, Current Events, Activities
Answer: Tens of thousands of dollars when looking at long-term loans like mortgages.
Great chart recently released by myfico.com (hat tip Motley Fool) demonstrates how current interest rates on mortgages vary based on credit scores:
Here’s a quick mini-activity for students to see how much a low credit score could cost them:
Using this simple mortgage calculator, plug in the following assumptions:
Home value: $234,000 (median sales price in September 2016)
Interest rate: 3.248% (high...
Aug 24, 2016
Chart of the Week, Mortgages, Credit Cards, Student Loans, Current Events
Here are the choices:
Paying my mortgage or rent
Lack of stable income
Paying for education
Not being able to retire
Not having enough money to fund an emergency
Wanting a nicer lifestyle
Paying off my debt
Answer: Paying off Debt!
From GoBankingRates.com (click on this link to find details about your state):
Want to teach your students to use debt responsibly? Please check out the NGPF Unit on Types of Credit!
Aug 01, 2016
Chart of the Week, Mortgages, Behavioral Finance, Question of the Day, Purchase Decisions, Current Events
Answer: You have to go back to 1965 to find home ownership rates equal to today’s rate of 63%.
Questions for your students:
Do you want to own a home some day? Why or why not?
What’s an appropriate headline for this chart?
How many years did it take the housing bubble to inflate (trough to peak)? How many years has it been since the market peaked? Where do you think it will bottom out?
What explains the drop since 2006?
What tends to happen with homeownership rates during...
Jul 21, 2016
Article, Mortgages, Question of the Day, Research, Investing, Current Events
Answer: Not so much.
From Nobel Prize winner Robert Shiller at New York Times:
Over the century from 1915 to 2015, though, the real value of American farmland (deflated by the Consumer Price Index) increased only 3.1 times, according to the Department of Agriculture. That comes to an average increase of only 1.1 percent a year — and with a growing population, that’s barely enough to keep per capita real land value unchanged.
According to my own data (relying on the S&P/Case-Shiller...
Jul 05, 2016
Cartoons, Mortgages, Behavioral Finance, Teaching Strategies, Advertising, Purchase Decisions, Current Events
Ran across a few cartoons that you might bring some levity to the classroom or amplify a key point.
Why did I select it?
Too often people think just because the bank lends you money, you can afford to take it. Since housing is the largest purchase most people make in their lifetimes, buying too much house has long term implications
Use in conjunction with NGPF Lesson on Mortgages
Why did I select it?
Most people do not know that they can bargain to reduce...
May 24, 2016
Featured Teachers, Mortgages, Teaching Strategies, Audio Resource, Professional Development, Podcasts, Tips for Teachers
I recently had the pleasure of having Brian Yanizeski, a Business Teacher from Fox Chapel Area High School in Pittsburgh, Pennsylvania, on the show. We recently honored Brian as an NGPF Teacher-Innovator for his “Home Buying Project.” Brian has five years experience teaching an online Investing and Finance course at his high school. Listen to this podcast to hear Brian share how he developed his online course (including his favorite resources), as well as how he manages it to keep his...
May 14, 2016
Activities, Mortgages, Question of the Day, Purchase Decisions, Current Events, Chart of the Week, Interactive
Interesting interactive tool (from Washington Post) to teach students about the hyper-local nature of real estate. Type in a Zip Code and the color coding on the map will show how housing markets have performed since 2004. Here’s a map from the Portland, ME area:
Why do I these graphs are important? Primarily in helping students understand the old adage in real estate about the importance of Location, Location, Location! Here are some questions to get the conversation started:...
Apr 10, 2016
Mortgages, Activity, Research, Purchase Decisions, Current Events
Great interactive tool from NY Times to aid in one of the most important decisions that individuals make in their lifetimes. This screenshot demonstrates how the user can adjust a set of variables (home price, time in house, mortgage details, growth in home prices and rental costs, taxes, closing costs and fees and maintenance costs) and immediately see its impact. Yes, that seems like a lot of variables, but you can see which ones really influence the outcome based on the shape of the...
Mar 14, 2016
Mortgages, Activity, Research, Budgeting, Purchase Decisions, Current Events
Simple interactive tool to teach students the variance in the cost of living within the United States. Since housing (rent or mortgage) is usually the single biggest cost factor in an individual’s budget, this is an important concept for students to grasp.
Students can click on a city on the map to collect the information about that metro area’s housing market:
Questions for students:
Pick three cities where you think you might be interested in living...
Jan 26, 2016
Mortgages, Behavioral Finance, Investing, Current Events, Video Resource, Financial Scams
I went to see the movie, The Big Short last week. I had enjoyed the book by Michael Lewis (I read everything he puts out) and wondered how it would translate to the silver screen. In particular, I wondered how they would take the alphabet soup of the “Great Recession” (CDOs, CDSs..) and make it understandable for a broader audience. Let’s just say, they succeeded.
So then I wondered how I might bring this into the classroom and found a short clip that I thought might...
Aug 13, 2015
Mortgages, Question of the Day, Research, Credit Cards, Student Loans, Current Events, Chart of the Week, Math
This chart released quarterly by the Federal Reserve presents several learning opportunities:
Lesson 1: Mortgage debt far exceeds all other consumer debts with a total of $8.12 trillion as of the end of Q2 2015. The next closest, student loan debt, stood at $1.19 trillion or almost 1/8 the amount of mortgage debt.
Lesson 2: Secured debt, loans secured by property such as home mortgages or auto loans, carry lower interest rates than unsecured debts like credit cards. I did a quick set of...
Mar 31, 2015
Mortgages, Question of the Day, Research, Credit Cards, Current Events, Chart of the Week
Interesting chart showing rejection rates by loan type over the past 18 months. It provides an effective way to show the difference between secured (mortgage and auto loans) and unsecured loans (credit cards) and why lenders think differently about them. Here are a few questions to ask students:
1. What loans have the lowest rejection rates (rejection means the lender says “no”)? Why do you think this is the case?
2. What loans have the highest rejection rates (are...
Feb 23, 2015
Credit Scores, Mortgages, Activity, Research, Current Events
As an educator, it is easy to tell students that before they buy any financial product (or any product for that matter), they should comparison shop. Far better, in my mind, to have students discover on their own the dollar and cents impact of spending a little extra time comparing alternatives, which is why I love this new “Check Interest Rates for your Situation” tool from the CFPB.
The tool allows consumers to see the range of interest rates on home mortgage loans available based on...
Feb 23, 2015
Mortgages, Behavioral Finance, Question of the Day, Research, Purchase Decisions, Current Events
Answer: Arguably, it is the biggest purchase that most people will make in their lifetime and yet 47% don’t shop around for their home mortgage.
Amazing statistic from CFPB report:
Buying a home is a big purchase, but it’s just that: a purchase. When it comes to spending money on our daily expenses, we have lots of options to help us find the best deal possible. Take, for example, digital gadgets. To get a good deal you can search for sales, find coupon codes, and research whether it’s...
Feb 03, 2015
Credit Scores, Mortgages, Activity, Question of the Day, Research, Current Events, Chart of the Week
I often find myself saying in class something along the lines of “You will pay more for loans (if you can even get them) if you have a low credit score. This mini-activity allows students to see ACTUAL data to calculate exactly how much more you would pay on a 30-year mortgage if you have a low credit score.
I found this chart on the FICO.com site:
Here are some questions that you can ask:
Calculate how much a consumer would pay for the 30 year home mortgage if their credit score was 639...