Mortgage – borrowing money from a bank to buy a house
Downpayment – a first payment that you make when you buy something with an agreement to pay the rest later
1 What are the pros and cons of owning and renting a house?
Do you want to take a mortgage to buy a house?
Let’s Begin…
Louie has got a couple of theatrical gigs and is expecting good money rolling in that’s why he goes to his accountant to check if he can afford the house he has his eye on. Turns out the situation is a little bit more complicated than he anticipates.
- Is housing affordable in Moscow? Why?
- Are there any initiatives to promote buying new flats?
- What does your ideal apartment look like? Where is it?
- What is the minimum price of an apartment in Moscow. What does that apartment look like?
- What are the mortgage terms?
Louie Hey.
Accountant Hey. Louie. How's it going?
Louie How are you, my man?
Accountant How are you?
Louie Good to see you, Ken.
Accountant, You don't stop up here too often. What's-- what's up?
Louie Just checking in.
Accountant Good.
Louie I got some theater gigs this month coming up, so some good money rolling in.
Accountant Great, great.
Louie A lot of good money coming in.
Accountant So what are you trying to buy?
Louie What do you mean?
Accountant Whenever you tell me you have good money coming in, it's because you want to buy something.
Louie Yeah, I know.
Accountant So... what is it?
Louie Well, okay. My girls and I are…We're still living in the same place as when I was married.
Accountant Right.
Louie And I just-- I think we need a fresh start.
Accountant Okay. So you want to move.
Louie Yeah, it's time and
Accountant Good, good, good, good. So have you started looking?
Louie Well, so I found a place.
Accountant Great. To rent?
Louie It's to buy.
Accountant Louie.
Louie I know.
Accountant Louie, we talked about this. You can't afford to buy anything right now. You're still paying support.
Louie I know, I just…This place is perfect and I know my girls would be really happy there.
Accountant Look, I'm your accountant. I can only tell you what you can afford and I think that you're gonna have a very hard time finding credit right now.
Louie Dude.
Accountant Okay. How much is it?
Louie Look, it's a lot, but…
Accountant How much?
Louie It's…For what it is, it's really cheap.
Accountant Right.
Louie Like, I couldn't believe… When the lady told me how much it was, I was blown away...
Accountant How much?
Louie ... by how little it is. But it is-- it's a lot, though, I'll acknowledge that. I acknowledge…
Accountant Louie. How much?
Louie Okay, it's... seven...teen...million. $17 million. So... I know it's a lot.
Accountant Um, Louie, do I really need to say anything? I mean...
Louie Well, I had a good year, you know, and I just…When do I get to step up, you know? I just feel like…come on, man.
Accountant Do I… do I really need to explain to you why you can't buy a $17 million house?
Louie I just thought if…maybe if I really bear down and I don't spend, like, you know, I don't spend a lot on other stuff. I could just change…I think I could change…
Accountant Let's-- let's take a look at the numbers.
Louie Okay, totally, yes, yes.
Accountant So that's 17 million. So you have to put down 3.4 million. And you have to put that down now, in cash. And then your monthly payments are gonna be 77,000, plus maintenance and tax. So basically, 80,000 a month, plus the 3.4 million that you're gonna plunk down right now, okay?
Louie Mm-hmm. Okay.
Accountant So now let's compare that to your current assets. All right, currently, in savings, you have 7,000.
Louie 7,000.
Accountant Yeah. So, um... you have less than ten times less than one mortgage payment on this house.
Louie Well, let me-- Okay.
Accountant Louie, you're gonna have to...
Louie If… if… I… 'Cause we haven't even…I mean, if I was able to get them to come down. I'm just saying, what could I afford right now? Like, what could I buy a house for right now?
Accountant Buy a house? Right now?
Louie Yeah.
Accountant Well... I mean, right now, you could buy a house that costs $7,000. You know, you should find a nice rental.
Louie I mean, isn't there... What about…what about Obama?
Accountant What…what about it?
Read the following phrases uninterrupted and as smoothly as possible
- A lot of good money coming in
- What do you mean?
- What are you talking about?
- What about it?