• Characteristics of an Adjustable-Rate Mortgage • Subprime mortgage crisis • Mortgage loans to borrowers who do not have sufficient income or down payments to qualify for prime mortgages • As interest rates increased in 2006, some home buyers could no longer afford their payments • Housing and Economic Recovery Act of 2008 allowed some homeowners to avoid foreclosure • Decision to Own a Home versus Rent • Consider financial assessment before considering personal preferences • Estimating the total cost of renting and owning • Renting–rent payment, security deposit • Owning–down payment, mortgage payment, closing costs, maintenance, taxes and insurance • Owning also has tax advantages • Financial Planning Online: Should You Rent or Buy? • Go to: http://realestate.yahoo.com/calculators/rent_vs_own.html • This Web site provides a recommendation on whether you would buy a home, based on your rent versus the expenses of the home you are considering •
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This note was uploaded on 02/22/2012 for the course FINANCE 250 taught by Professor Maryevans during the Spring '12 term at Rutgers.