• 60 minutes

Lesson Prep

  • This lesson will talk about buying a home in cash or with a 15 year mortgage


  • Welcome back, everyone! We’re eight lessons in, so let’s take a minute and celebrate some wins: Has anyone moved forward in the Baby Steps since Lesson 1?
  • Review the Baby Steps
  • Do a budget checkup
    • How has living on a budget been going this week compared to the very first week you started?
    • Is budgeting becoming more of a habit for you? How so?
  • Instruct everyone to turn to page 117 in their Member Workbook
  • Take attendance and watch the video
  • Look for your coordinator cue before the One-Minute Takeaway to get ready for the Activity


  • A house is the largest financial investment you will ever make
  • Here’s your home buying plan
    • A 15-year fixed-rate mortgage
    • 10% down payment
    • Monthly payments <= 25% of take-home pay (including HOA fees, insurance and taxes)

Mortgages to avoid

  • Adjustable-rate mortgage (ARM)
  • Interest-only mortgage
  • Reverse mortgage
  • Subprime mortgage
  • Balloon mortgage
  • United States Department of Agriculture/Rural Housing Service (USDA/RHS) mortgage
  • Accelerated or biweekly payoff programs
  • Any mortgage with a prepayment penalty

Best way to finance a house

  • BEST - Conventional loan (Fannie Mae, FNMA)
  • FHA loan
  • VA loan

Real Estate Relator

  • Interview at least three Real Estate agents


  • Let’s turn to page 123 and take a few minutes to read and work through the case study. This is a basic example to help demonstrate how different mortgage options can impact your finances.

Discussion Questions

  1. When you picture your dream home, what do you see? What parts of your home stand out, and why are they important to you?

  2. Based on what you’ve learned from Dave, how do you know if you have too much house?

  3. Based on your answer to the last question, do you need to make any adjustments to your housing situation? If so, what? Refinance? Downsize? Throw more money at your mortgage?

  4. If you’re a homeowner, think about life without a mortgage. What could you do with the extra money that’s currently going toward payments? If you’re renting, how do you feel about owning a home someday? How could you save up for one?

Wrap Up

  • Go to page 125 and read through the action steps
  • Remind class members to complete their last Financial Snapshot.
  • Keep working on your budget
    • You need to be aware of how much you have spent on certain categories
    • You need to make a monthly budget
      • You need to be having Budget Committee Meetings