Assignment Instructions/ Description
Can someone help me with this and let me know if I filled this out correctly? This is due July 24th, 2023.�Image transcription textName:
Maria Lebedev
Date:
July 24, 2023
Renting vs. Buying Housing
22
Purpose: To compare the cost of renting or buying your place of residence.
Financial Planning Activities: Obtain estimates for comparable housing units for the data requested below.
Suggested Websites:
www.homefair.com
www.newbuyer.com/homes
finance.move.com
www.dinkytown.net
Suggested App:
Realtor
Rental Costs
Annual rent payments
(monthly rent $2,500.00 X 12)
$30,000.00
Renter's insurance
$240.00
(personalinsure. about. com/cs/renters/a/aa102102a.htm)
Interest lost on security deposit
Security deposit
$5,000.00
times
after-tax savings interest rate
0.07%
$3.50
Total annual cost of renting-
$30,243.50
Buying Costs
Annual mortgage payments (compute):
Mortgage amount
$363,891.00
Term of mortgage
30.00 years (with monthly payments)
Interest rate
5.76%
$28,342.60
Property taxes (annual costs)
$2,690.00
Homeowner's insurance (annual premium)
$2,021.00
Estimated maintenance and repairs (1% of home value)
$6,000.00
After-tax interest lost because of down payment/closing costs:
Total down payment and closing costs
$636,000.00
x After-tax savings interest rate
0.07%
$445.20
Less: financial benefits of home ownership
Growth in equity
$241,343.00
Tax savings for mortgage interest
$1,478.40
(annual mortgage interest times marginal tax rate)
Tax savings for property taxes
$924.00
(annual property taxes times marginal tax rate)
Estimated annual appreciation (1.5% of original price)**
$3,300.00
* This is a nationwide average; actual appreciation of property will vary by geographic
area and economic
conditions.
Total annual cost of buying--
$207, 546.60
Is It Better to Buy or Rent?
In this case, it is better to
buy. The annual advantage to buying
$237,790.10
What's Next for Your Personal Financial Plan?
* Determine if renting or buying is most appropriate for you at the current time.
List some circumstances or actions that might change your housing needs.... Show moreCan someone check if I filled this out correctly? This is due the July 24, 2023. Thanks!��