CheckPoint Week 1 A New House

CheckPoint Week 1 A New House - own that property. There...

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CheckPoint Week 1 A New House-Readiness Whether to buy a home or not is a life changing decision and experience. Therefore; when deciding whether to buy a home all aspects should be considered. A major principle that plays a big part of purchasing a house is the cost of it and what you give up to get it. I had to compare the costs and benefits of either buying a house or renting a larger apartment now that living in a studio is no longer feasible because we will be expecting the arrival of a baby. In a house there will be more space and will allow to pick a house closer to better schools, but we will have to cut back on some luxury items to adjust to the change in our budget so we are able to afford a new home and the extra expenses that go along with it. Some added expenses of owning a home include property taxes and home owner’s association dues. When renting an apartment you do not have those extra costs. With renting; however, you must also consider that you will never
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Unformatted text preview: own that property. There are definitely tradeoffs and benefits that should be carefully considered. Another factor to consider is current market price for homes. You would not want to buy a home if you know the prices will soon go down, if you know they are going down it might be better to wait. Another important principle to consider when purchasing a home is rational people think at the margin. You must consider the marginal benefits that could be gained by buying a house. Included in the marginal cost is the down payment, closing cost, moving costs, etc. In the long run once the house has been paid off and the value has increased these factors far outweigh the marginal cost. So, because of all of these principles it really would be a smarter decision to purchase a home rather than rent a larger apartment....
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This note was uploaded on 02/28/2012 for the course ECONOMICS XECO 212 taught by Professor Tsilis during the Spring '09 term at University of Phoenix.

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