A New House � Decision

A New House � Decision - A New House - Decision 1 A...

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A New House - Decision 1 A New House – Decision Alesya Kashirets October 3, 2010 XECO 212 Nancy Wegman
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A New House - Decision 2 The decision to purchase a house is one of the most important decisions that the average consumer will make in his or her lifetime. This decision must be weighed very carefully regardless of one’s financial circumstances. In an unpredictable economy, such as the one United States faces now, the weight of this decision is even heavier. If one makes the wrong decision, it could have financial repercussions for years to come. There are many points to be considered when deciding on whether or not to buy a house. One has to think about the 10 principles of economics, the economy as a whole, government spending, the marginal costs and benefits, and even what role the future of the economy will play towards this decision. The potential homebuyer should ask themselves several questions such as, what are the tradeoffs in purchasing a home? What will one have to give up and what will a person gain in purchasing a home? Can the government be of assistance to a potential homeowner? What are the marginal costs and benefits that must be taken into consideration? How strong is the economy and does it support purchasing a home at this time? Deciding to purchase a house is not a decision that could be made overnight. Prior to making the decision to buy a new home, it is imperative that the would-be buyers to have a general understanding of the 10 principles of economics. The 10 principles of economics provides the basic information needed to better understand what economics is and how it helps to make more informed decisions. As a new homeowner, one will now have responsibilities that were not there before. For example, the homeowner now becomes accountable for the maintenance and upkeep of the property
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A New House - Decision 3 rather than the rental property owner. This new owner responsibility could increase the cost of owning a home, which many new homebuyers fail to consider. There are many perspective home owners who fail to recognize that they are not just giving up a rent payment in exchange for a mortgage payment, but so many other financial obligations will begin or increase which may include property tax, homeowners insurance, and possibly fees associated with homeowners associations. While the would-be buyers may have current living arrangements that are located within an area that is not within a school district, they made the choice to live at that location because it may be closer to work, which represents an opportunity cost of buying a home. The 10 principles of economics that are used to make one’s decision in the
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A New House � Decision - A New House - Decision 1 A...

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