Wk6DQ3 - variable costs, equity may go up, down, or stay...

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There are many disadvantages and advantages of renting verses buying. Some advantages of renting are if the home prices are so high that you cannot afford a 20 or 30 year term fixed mortgage and instead having to choose an adjustable rate. By renting you don not have to sign these risky loans. You do not have to worry about any repairs, when the water heater breaks, just call your landlord, when the lease is up you can just move. There is a smaller amount of "up-front" cash. Some disadvantages may be that whatever happens with the value of the home, you will never gain any equity, you have limited or no ability to customize your home, and there is no tax advantage to renting. Your landlord gets any and all tax breaks that are available. Some disadvantages to buying a home are the
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Unformatted text preview: variable costs, equity may go up, down, or stay the same. If you want to move, your home usually needs to be sold. Any work that needs to be done, you have to do it yourself or hire outside help and is paid by you. There is generally a larger initial investment such as the down payment. Some advantages of buying your home would be; over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase. You have the ability to remodel and redecorate your home to match your needs and desires. There can be tax advantages attached to home ownership. Also, you are not paying someone elses mortgage....
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This note was uploaded on 11/21/2011 for the course PERSONAL F 101 taught by Professor Agnew during the Spring '10 term at University of Phoenix.

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