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Teaching by Topic: Home Loans

Here are a bunch of tips, learning objectives, worksheets, and pre-built lesson plans to help you build your curriculum to teach students about home loans!

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Buying a home is one of life’s biggest financial steps. Teaching your students how to plan for the lending process that many homeowners have to go through is crucial. Below, you’ll find learning objectives (set by the National Standards for Personal Finance Education), lesson plans, worksheets, games, activities, and tips to show your students the ins and outs of home loans.

National Standards for Personal Finance Education

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K – 4th Grade

Tips for Teaching About Home Loans

Your K – 4th graders learn about borrowing and making informed decisions. You can develop a solid base for students to understand home loans later, showing them how credit and interest rates work in upper elementary. Games, teamwork, and class stores are all excellent ways to show how credit and borrowing work.

Learning Objectives

  • Spending 4-1c: Prioritize future spending, taking resource limitations into account.
  • Spending 4-2c.: Identify ways you spend your money to increase personal satisfaction.
  • Spending 4-4a: Compare the costs and benefits of purchasing an item for people with different characteristics (e.g. age, income).
  • Managing Credit 4-1b: Describe the reasons why businesses and individuals sometimes lend money to others.
  • Managing Credit 4-3b: Discuss why a person might be reluctant to lend money or personal possessions to someone who has a history of not repaying previous loans.

Lesson Plans

  • KMLP 2nd Grade – Opportunity Cost: Students see how making purchases (particularly large ones) requires a tradeoff. They see how to manage their money, spending, and saving while staying within budget.
  • KMLP 4th Grade – Managing Credit: This lesson provides a comprehensive overview of credit, including interest, why lenders favor one person over another, and why people prefer using credit instead of cash. They play a game and fill out a graphic organizer.
  • Vault: This financial literacy resource covers many concepts, including credit and borrowing. It uses technology to engage students and keep them learning.
  • Money Responsibility: This lesson teaches kids the basics of responsible money management, budgeting, and seeing what they can afford. It focuses on record keeping, which will help students with loan management later.
  • Making Spending Decisions: In this lesson, kids see how every financial decision matters, and the larger the purchase, the bigger the consequence. They recognize that money is limited and they should analyze each choice.

Worksheets

  • Decision Making Worksheets: These worksheets show students how to break choices into components to see what they did right and wrong in the process.
  • Decision Tree: This worksheet requires students to list all the steps they took in a decision, increasing their awareness.
  • Banking Terms Worksheet: This fun worksheet introduces key banking terms, including several about home loans.
  • Comparison Shopping: This worksheet shows students how to compare similar items, which you can transfer to home loans and big-ticket purchases.
  • Allowances and Spending Decisions: This worksheet shows students how to budget and choose between wants and needs.

Teacher Guides by Grade Level

5th – 8th Grade

Tips for Teaching About Home Loans

Your 5th – 8th-graders have a solid math base, including multiplication and long division. Use this foundation to introduce interest calculations and mortgage payment problems. There are many games and activities to work on these skills.

Learning Objectives

  • Spending 8-2b: Explain the types of information most helpful in making a purchase decision.
  • Spending 8-4b: Explain how various payment methods are used to purchase goods and services.
  • Spending 8-4c: Summarize the advantages, disadvantages, risks, and protections of various payment methods.
  • Managing Credit 8-1b: Compare lenders based on type of credit offered, interest rates, and fees.
  • Managing Credit 8-3a: Describe the effect of higher interest rates and longer loan terms on the total cost of a loan.

Lesson Plans

  • KMLP 5th Grade – Credit and Debit: Students learn about the various types of payments and purchasing methods. They focus on credit, looking at the pros and cons of loans.
  • KMLP 7th Grade – Personal Finance: In this lesson, kids see how to plan long-term and short-term goals, balancing expenses and income to succeed. They learn how to incorporate loan payments and other costs into their budgets.
  • KMLP 8th Grade – Managing Credit: Kids understand the different types of loans, seeing how interest tacks on costs to the principal. They watch a video, research credit reports, and play a game to see how lenders can be dishonest with consumers.
  • Mortgages – BrainPop: This engaging lesson includes a video, vocabulary, worksheets, and graphic organizers to learn about mortgages and home loans. You can give students the quiz immediately after to gauge understanding.
  • Life Is About Choices, And Choices Have Consequences: This lesson shows students the importance of major financial purchases. It covers home loans, mortgages, and when to buy a house – giving students a useful foundation.

Worksheets

  • Loans and Interest Activity: This worksheet requires students to calculate simple interest on home loans, giving them hands-on practice for their future.
  • Middle School Money: Loan/Interest Calculations: This worksheet is a straightforward practice for students to determine how much interest can add to loans.
  • Borrowing Money For a House: Students complete this worksheet to see how loans work, calculate interest, and compare loan offers to find the best fit.
  • Buying a House: Students complete this worksheet set to determine how to pay for a home and see the costs involved.
  • Mortgage Shopping: This worksheet has students compare loan offers from multiple lenders.

Games and Activities

  • Financial Literacy: What Can Banks Offer You?: This activity shows students a broad overview of banking, including the role of interest and how loans work.
  • Calculating Payments on a Loan/Investment: This Excel activity lets students play with various numbers and determine how much monthly and total home loan payments would be.
  • Asking For A Loan: Students learn how to persuade and use evidence to request a loan in this activity. They practice their speech on a family member.
  • Telling the Difference Between Loan Myths and Realities: Students determine statements about home loans and decide whether they are myths or truths in this activity.
  • Dream House Mortgage Calculations: Students first decide on a dream job and see if their salaries would be enough to afford home loan payments in this activity.

Teacher Guides by Grade Level

9th – 12th Grade

Tips for Teaching About Home Loans

High schoolers know the significance of owning a home but still need to understand the home loan process. Giving them hands-on, practical information and activities will benefit them greatly.

Learning Objectives

  • Spending 12-2b: Describe a process for making an informed consumer decision.
  • Spending 12-5b: Brainstorm consumer research strategies and resources to use when making purchase decisions.
  • Spending 12-6b: Compare the short-term and long-term costs and benefits of renting versus buying a home in their city of residence.
  • Managing Credit 12-3b: Differentiate between adjustable-rate and fixed-rate mortgages.
  • Managing Credit 12-6c: For a specified loan amount, compare the monthly loan payment with a 10% down payment versus a 20% down payment.

Lesson Plans

  • KMLP 12th Grade – Managing Credit: In this lesson, students learn about credit, how to access their credit history, and how to improve their credit scores to get the best loans possible. They watch a video and play a game to develop money management skills.  
  • KMLP 12th Grade – Spending: Students take a look at renting vs. buying, weighing the pros and cons of each. They then complete a buying plan activity to factor in loan payments and mortgages.
  • Calculating Loan Payments: In this lesson, students analyze a case study to see how amounts borrowed, down payments, and interest rates impact finances. They also learn to make informed choices about credit offers.  
  • Qualifying For Loans: This lesson shows students how to differentiate between secured and unsecured loans and use that information to see how to qualify. They apply their knowledge to decide if individuals will be eligible for specific loans or not.
  • Determining How Down Payments Affect Loans: This lesson demonstrates the importance of significant down payments on loan costs. It covers home loans as well as other types of loans, giving students a broad understanding of how the process works.

Worksheets

  • Reading About Credit Scores: Students read a handout and use the worksheet to take notes and reflect on credit scores, a critical component in home loans.
  • Angela Builds Her Credit: This worksheet follows Angela as she tries to build her credit, showing students how credit scores go up and down and how to qualify for the best loans.
  • Reflecting on Needs and Wants: This worksheet reminds students to prioritize needs and wants, which teachers can connect to home loans and buying a house. 
  • Personal Credit Report: This worksheet requires students to find information within a credit report, identifying essential components that will boost or harm their credit standing.
  •  Interest and Percent Growth: Students compute loan-interest math problems in this worksheet.

Games and Activities

  • Differentiating Between Secured and Unsecured Loans: This activity breaks down the differences between different loan categories. 
  • Identifying the Missing Credit Score Category: Students work in pairs in this activity to determine what factors influence credit scores. 
  • Role-Playing Borrowing and Lending: This partner activity lets kids practice being a lender and a borrower to see which factors come into play in the home loan process. 
  • Mortgage Calculator: This tool is a practical way for students to see how down payments and interest rates factor into their loan payments.
  • Buying A Home: This activity shows students the many decisions that go into purchasing a home, including shopping for a mortgage and computing mortgage costs.

Teacher Guides by Grade Level

More Teacher Resources

About the Author

Peter Brown

Peter Brown is a National Board Certified teacher with over two decades of experience in the classroom. He loves working with students of all ages in many subjects, but particularly in practical areas like money education, to help kids achieve their goals. When he is not teaching or writing about financial literacy, you can find him surfing, hiking, skiing, or traveling to new places.

Last updated on: December 12, 2022