Homes and Vacation Homes

Overview/Description
 Are you thinking of buying your first home or maybe buying a second home? Buying a home may be your largest financial transaction to date, so it's important to make the right decision. This course will help you to understand whether or not buying that first home or vacation home is right for you and how much you can afford to pay. It will also cover what is involved in purchasing a home, the tax benefits you can expect from being a homeowner, and what changes happen when you rent out your home or part of it. Throughout this course, most tax rules or tax values provided for examples and calculations are based on the year 2001 tax guide.

Target Audience
 General American Audience

Expected Duration
3.0 hours

Lesson Objectives:

Buying a Home

  • recognize the benefits of understanding the financial issues of buying a home.
  • identify examples of variables to consider when comparing buying and renting a home.
  • calculate the housing and total obligations ratios.
  • determine the amount of money individuals can borrow under standard lending guidelines, in a given scenario.

    • Mortgage Options

  • recognize the importance of understanding mortgage options.
  • match the advantages of fixed and adjustable rate mortgages to examples.
  • calculate the difference in payments for a 15-year mortgage and a 30-year mortgage.

    • Buying Vacation Homes and Time-shares

  • recognize the benefits of understanding how much you can afford to pay for a vacation home or time-share.
  • recognize how applying for a mortgage for a vacation home differs from applying for a mortgage for a primary home.
  • determine if a person can afford a specific vacation home.
  • recognize key considerations for buying a time-share.
  • determine if the asking price is worth it for a specific time-share.

    • Tax Write-offs

  • recognize the benefits of learning about available tax write-offs for real estate.
  • identify which tax write-offs people can claim, in a given scenario.
  • determine if a home office can be claimed for the principal-place-of-business deduction, in a given situation.
  • select the rules for claiming other home office deductions.
  • apply the rules to determine if a home office deduction can be claimed, in a given situation.

    • Rental Properties

  • recognize the benefits of understanding the tax effects of owning a rental property.
  • recognize the criteria a property must meet to be considered a category 1 property.
  • calculate the deductible operating expenses for a specified Category 1 rental property.
  • apply the tax considerations for a given Category 2 property scenario.
  • recognize the tax rules for time-share owners and vacation home co-owners.

    • Course Number: PD0142