4009FIN : Buying your First House - Principles of Finance Assignment Brief | Coventry University

Assignment Task

This assignment requires you to produce a report on buying your first house, focusing on 5 aspects:

1. Establishing goals,
2. Produce the following:
   a. Net worth statement,
   b. Income & expenditure statement,
   c. Budget, and
   d. Calculate income tax
3. Identify suitable types of property for first-time buyers
4. Discuss different types of mortgages, and
5. Assess life and health insurance needs for first-time buyers.

To complete the assignment, use the case study below:

Having graduated from Coventry University, you have just been offered a job with a gross salary of £27,500 per annum. Your employer has offices in Coventry, Birmingham, Leicester, Manchester, and London and you can choose to work in one of these locations.

As a single person, you are currently living in a shared accommodation and paying £500 a month rent (including bills). You have a good credit record. You have a credit card with a monthly balance of £400 but you always clear off the balance at the end of every month. Your utility and phone bills, car loan payments, and household insurance premiums, local council tax and gym membership, are all paid by monthly direct debits. You have £2,500 of personal loan, which you took out to buy a car.

You are planning to buy your first home in 2025. Your family has given you £5,000 to help you with this.

In this report, you are required to cover the following 5 questions:
1. Having graduated from university and started a new job, outline your financial goals for the next 5 years.
2. Use the information below to prepare a networth statement, income and expenditure statement, budget, and calculate income tax:
Assets
Inheritance (cash in bank) £5,000
Car £1,000
Books £ 500
Computer/phone £750
Personal items £250
Liabilities
Student debt £50,000
Personal loan £2,500
ncome (gross) £27,500 (work out net income per month after tax and national insurance)
Expenses (per month)
Rent (including bills) £500
Council Tax £110
Food £150
Mobile phone £45
Gym membership £35
Entertainment £250
Travel/petrol/insurance £250
Clothes £100
Miscellaneous £150
Car loan payment £150

Prepare a net worth statement, income & expenditure statement and a budget and propose changes to your statements (assets, liabilities, incomes and expenses) to improve your financial situation and prepare you for your property purchase.

3. Search on www.yourmove.co.uk for a property (house or flat) that you wish to buy. Describe the property and explain why you have chosen it. Your explanation should reflect your life, work and financial circumstances including affordability. (No mobile homes, or homes on sharedownership scheme)

4. When you buy a property, you need to pay a deposit and apply for a mortgage.
a. Explain how you will raise the deposit and how a Lifetime Investment Savings Account (LISA) can help you.
b. Search online for 3 different mortgage options from the same lender or different lenders. Analyse the pros and cons of each type of mortgage and make your choice in relation to your goals and affordability.

5. Critically discuss why you should consider a life insurance, an income protection and a critical illness policy. 

Assessed Module Learning Outcomes 

The Learning Outcomes for this module align to the marking criteria which can be found at the end of this brief. Ensure you understand the marking criteria to ensure successful achievement of the assessment task. The following module learning outcomes are assessed in this task:

1. Evaluate and explain how the wider economic, social and legal context impacts financial planning by individuals and households.
2.  Identify and examine the financial responsibilities and decisions associated with different stages in life and the financial products appropriate to those decisions.
3. Appraise the importance of personal financial planning, budgeting, managing credit and saving.
4.  Undertake and interpret calculations associated with basic financial and retirement planning, e.g. prediction of income, valuation of a stream of cash flows, and the annual savings needed to build a capital value.
5. Evaluate the main types of investment, including their varying levels of risk and return, and be able to identify a range of investment strategies and the theories behind them.