...in their lifetime. The extreme difficulty to amass enough savings to purchase a home up front causes most people to obtain a mortgage, a loan to finance the purchase of your home. There are various types of mortgages and many pros and cons that come with each. To determine whether or not you are eligible for a mortgage loan, you must consider your credit history, how much money you can put toward a new home, and the new costs that come with owning a home. You also have to consider the principle, the sum of money you borrow to buy your home, the interest on your mortgage payments, property taxes, and homeowner’s insurance. Understanding the financial considerations that go along with buying a home and creating a financial plan prior to your decision is the base for a successful start. Discussion The key to successfully buying a home is to determine how much you can afford and starting your research early. I would start by calculating my mortgage limit by finding what the principle, interest, taxes, insurance, as well as my other liabilities to establish a plan and limit on the price I’m willing to pay. I would then determine the area in which I wish to live based on the location of my work, home prices, and housing trends, such as price fluctuations and how long homes have been on the market, in certain areas. I would also have to consider the financial setback buying a house would cause. Not only do most sellers require a twenty percent down payment on the home, there are closing...
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...thought is that if you rent you’re throwing away money. Owning your own home is a forced savings plan. We have always heard statements like these plenty of times. On television, radio, the internet, and in casual conversation. Such sentiments are common in any discussion that involves home-buying and personal finances. Let’s take a look at some of the financial differences between renting and home-buying. Now for the purpose of comparing renting to owning in this essay, I’ll be using real-world data gathered from my Orlando area (West Orlando). Although most first-time buyers tend to move from renting an apartment to buying a larger, stand-alone house, as much as I can I will compare apples to apples. • For rent, I located a 3-bed, 2.5-bath, 1,840 sift house with an attached 2-car garage, on 0.2 acres. Monthly price: $1,495. • For purchase I found a 3-bed, 2.5-bath, 1,850 sqft house with an attached 2-car garage, on 0.22 acres. Price: $424,950. The two homes are located within two miles of each other in similar neighborhoods, and neither is located on a busy road. We’ll assume that our hypothetical homebuyer is a married couple with $85,000 in the bank to make a 20% down payment. To calculate mortgage payments we will use a recent 30-year fixed interest rate of 6.25%. Let’s look at how the monthly costs break down (approximately) for our hypothetical potential first-time homebuyer: Renting Buying Rent/Mortgage: $1,495 $2,093 Insurance: $20 $163 Property Tax: - $407 Tax...
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...Buying or Renting: Which is better for you? Your Name Com/156 Current Date Your Instructor Buying or Renting: Which is better for you? Introduction Many times we are faced with the challenge of choosing between buying a home and renting one. There are various advantages and disadvantages related to each of these options that an individual has. It is the dream of each individual to own a home in a good environment which is secure and peaceful. There are two options that one can choose from when considering a home. One can either rent or buy. It is important to carry out a thorough investigation on each of the options and make an informed decision. The decision of buying or renting any asset is crucial and should be critically analyzed. Therefore, it is important for one to take into account the benefits and costs involved in each option before deciding on the one to take. One might choose to use a buy vs rent comparison tool such as the mortgage calculator that can be provided by a lender or real estate broker. The Rent versus Buy Comparator allows the user to compare their estimated financial position after 7 years of renting with their estimated financial position after 7 years of home loan repayments (Realtor.com, n.d.). This tool will allow the buyer or renter to compare the possible financial cost and assists in making the decision whether to buy or rent. Moreover, most finance calculators will take into consideration the rent, rent insurance, expect...
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...Your personal finance goals should be catered to your circumstances. It's likely that you're ready to start a family or working towards the goal of having a home. The things you want in your future depend on sticking with your financial goals. 1. Emergency Fund While it's painful to consider, you could lose your job at any moment. Nobody ever plans on losing their job, but you can save money to cushion yourself in case of this kind of traumatic event. It can take up to 6 months to find a new job and get settled into the new position. so your emergency fund should cover 6 months of your current salary. 2. Start Thinking Retirement As you're considering that emergency fund, it's time to start thinking about your retirement. Whether you're...
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...salary c. about the total cost of 4 years of their education d. less than 150% of their first-year salary 4. Which of the following is considered a very good credit score? a. 500-559 b. 600-659 c. 700-759 d. 760-859 5. What is a credit utilization rate? a. How many open credit accounts you have b. The percentage of all your reported credit accounts that are open accounts c. Your total outstanding balance as a percentage of total credit limit d. How often you use credit to make purchases 6. What is the main disadvantage of using only a debit card? a. Debit card purchases are not reported to credit reporting agencies and therefore will not help you build your credit score. b. Not all stores accept debit cards. c. You may earn better rewards with a credit card. d. Credit cards offer fewer protections if your card is lost or stolen. 7. Which of the following is not an effective way to think about money? a. Live below your means but within your needs. b. Only purchase needs, not wants. c. Financial freedom requires making a lot of money....
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...account every consideration and great care in choosing whether or not to move, what the pros and cons will be and how to prepare financially for a move. Economics is defined as “a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services (Mirriam-Webster Online, 2011), and economics greatly affects daily living. There are 10 principles that economists follow and can associate with daily living and financial changes on a small or large scale, and which can help to predict future trends in currency, unemployment, and housing. The 10principles of economics is also a good guide to follow when trouble-shooting personal, financial, and moral decisions to be successful on any new venture. Number one on the principle list is trade-offs. A trade-off is anything that you must give up to obtain what you want. A new home will be quite a costly venture so the need for efficiency will come into play, meaning getting all that you can out of your resources. Once it has been figured out what you will need to purchase a new home, you can figure out what you will...
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...MANAGING YOUR FINANCIAL SITUATION Cancer and its treatment can leave a survivor with a need to review current and future financial goals. Events such as illness, disability, employment changes and investment disappointments can affect your personal and financial well-being. An assessment of your situation can help define your present financial status as well as prepare for future planning, saving, spending and dealing with financial emergencies. Preparation for changes and challenges to finances can contribute to increased financial security. ------------------------------------------------- Assessing and Managing Your Financial Situation: Detailed Information This information is meant to be a general introduction to this topic. The purpose is to provide a starting point for you to become more informed about important matters that may be affecting your life as a survivor and to provide ideas about steps you can take to learn more. This information is not intended nor should it be interpreted as providing professional medical, legal and financial advice. You should consult a trained professional for more information. Please read the Suggestions and Additional Resources documents for questions to ask and for more resources. Cancer and its treatment can leave a survivor with need to review current and future financial goals. Dealing with financial matters might seem overwhelming. However, an assessment of your current situation can help define your present financial status, as...
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...developing a comprehensive budget for successfully managing your personal finances and planning in advance for the future. As you have seen, our process of developing this plan for effective day to day management of financial activities required an in depth review of your personal financial records, use them to create your personal financial statements, and to create and implement the plan for spending and saving. In addition to the financial records provided, other factors are considered. These factors are your age of 40 years old, the fact that your education level is a bachelor’s degree, you are single with no dependents, never married, have worked for the same Engineering firm for the past 18 years with a stable and increasing annual salary throughout your career. I further understand that you feel like you are not quite gaining on credit card debt as you had hoped at this point in your life, and your thoughts are beginning to become more serious about your retirement and how you should be preparing, financially. Your goals of being able to retire earlier than your friends and live comfortably can be obtained. Your goal of becoming debt free before you’re 45th birthday is also attainable. This memorandum will provide a brief summary of my main observations and my recommendations for improving your financial situation by developing a plan forward. The first thing we did was take a look at your current financial position by listing all assets and liabilities to come up...
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...Michael De Marco Personal Budget Summary and Findings Memo DATE: October 1, 2012 TO: Henry and Mary Jones FROM: RE: Follow-up on Financial Planning Meeting It was a pleasure to meet with both of you to discuss your personal finances, your financial dreams, and concerns. As we discussed, being in control of your personal finances, and not your finances being in control of you, is very important. When you are in control of your finances you can achieve your financial goals and comfortably provide for you and your children. Below is a summary of my findings and recommendations for you to help achieve your goals. You will also see attached your personal budget that you provided and the balance sheet and cash flow statement I created based on the financial data you provided me. Summary of Facts Henry is 37 and Mary is 38. Henry and Mary have two sons, ages three and one. Henry has a high school education and Mary has a master’s degree in Library Science. Henry is a truck driver for a major oil company and earns a yearly income of $95,000. Mary works as a librarian for the local school district and earns a yearly income of $50,000. Two major concerns regarding Henry and Mary’s financial position is the lack of savings and debt. They have very little money in savings and a large amount of debt. Their goals are to pay off their debt and fully fund college funds for both their children. Summary of Key Items Henry and Mary bring home a substantial amount of earnings...
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...Money Management There are times when individuals feel that all of their money goes to paying off debts. We have credit card payments, car payments, and mortgage payments. Having too many debts can sometimes be overwhelming. While some bills are unavoidable, such as mortgage payments, most bills can be avoided by utilizing better money management skills. Poor money management is the third leading cause of debt (Bucci, 2005). Developing a monthly spending plan is one of the most important steps a person can take when managing his or her money. A monthly spending plan can be useful to track what our expenses are on a monthly basis. In order to track our expenses, we need to write down everything that needs to be paid making sure that we do not forget anything. We then need to evaluate the importance of each expense to see if it is a necessary expense or one we can eliminate. One way to do this is to list those expenses in the order of their importance. One example would be the mortgage on your home. This should be the most important expense on your list. When making your list you need to make sure to write down how much money is needed for each of the expenses. Your monthly expenses should not exceed your monthly income. An example; if your mortgage payment is more than half of your monthly salary, you would not want the remaining expenses to equal more than the remaining 50% of your salary. People whose expenses are greater than their income can become extremely stressed due...
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...pay to advertise. Before buying anything on the Internet, check several websites and make sure you deal with reputable dealers. Transportation Airline Fares 1. Compare low-cost carriers with major carriers that fly to your destination. Remember, the best fares may not be out of the airport closest to you. 2. You may save by including a Saturday evening stay-over or by purchasing the ticket at least 14 days in advance. Ask which days of the week and times of the day have the lowest fare. 3. Even if you are using a travel agent, check airline and Internet travel sites, and look for special deals. If you call, always ask for the lowest fare to your destination. Car Rental 4. Since car rental rates can vary greatly, compare total price (including taxes and surcharge) and take advantage of any special offers and membership discounts. 5. Rental car companies offer various insurance and waiver options. Check with your automobile insurance agent and credit card company in advance to avoid duplicating any coverage you may already have. New Cars 6. You can save thousands of dollars over the lifetime of a car by selecting a model that combines a low purchase price with low depreciation, financing, insurance, gasoline, maintenance, and repair costs. Ask your local librarian for new car guides that contain this information. 7. Having selected a model and options you are interested in, you can save hundreds of dollars by comparison shopping. Get price quotes from several dealers...
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...a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time. Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers? Take your eyes off them for 10 seconds and guaranteed, they'll be into some shit again: This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard. It's been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they'd be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers...
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...NACA QUALIFICATION CRITERIA The NACA Mortgage is our answer to the huge sub-prime and predatory lending industry. NACA has conclusively shown that when working people get the benefit of a prime rate loan, they can resolve their financial problems, make their mortgage payments and become prime borrowers. NACA’s track-record of helping homebuyers with credit problems become homeowners debunks the myth that high rates and fees are necessary to compensate for their “credit risk.” NACA’s mission is to make homeownership available on the best terms for Members who would otherwise be prevented from obtaining an affordable mortgage. NACA is open to everyone regardless of their income or where they want to live as long as they adhere to our eligibility requirements, policies, and procedures. The real estate and mortgage industries are filled with bad actors who contribute to the destabilization of our communities and the exploitation of working people. As an alternative to these predatory practices, we will work with you for as long as it takes to purchase a home, and we will support you for as long as you have your NACA Mortgage. The NACA Qualification, which is required for a NACA Mortgage, is an extensive analysis of your finances to determine whether you are ready for homeownership and what monthly mortgage payment you can comfortably afford. Depending on your situation, this process can take one session, several months, or longer. NACA will work with you for as long as it takes to...
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...A New House - Decision Tonya L. Pugh XECO/212 ECONOMIC THEORY May 6, 2012 Frederick C. Runge, MBA, PMP Growing up all I ever dreamed of was one day to get married to the perfect man, have two perfect little children, and to own my own perfect little house. I did not follow that order when getting these things; however, at thirty six years old I do have it. I am a wife, and no man is perfect I have learned. I am a mother to three beautiful and healthy children, an eighteen year old daughter and twins (girl and boy) who are nine. The house, which is perfect for us in its own right, is coming now, after a lot of hard work and sweat, not to mention a lot of planning and decision making. Locating a house in an area we want to live in is the easiest part of looking for our new home. My husband and I have chosen to stay in the area we are currently living in and renting a home. Everyone here is close and we all look out for one another. My parents are not far, so they can get our children from school and watch them until we get home from work. The local elementary and middle school is within walking distance from the houses we are looking at, as well as the local hospital, fire and police departments, church and local health clinic. Before we move any further in buying our home we need to sit down and make a list of the pros and cons for buying and renting. This is now the biggest decision we are facing in our lives and what we decided will affect us for a long time to come. We need...
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...Assignment 2: Financial Project Coming up with a plan to eliminate five years off of a home loan, in my opinion, the first thing to do is verify where you are on the schedule, and change one variable to measure its effect. The variable to be changed would be reducing the remaining amount of time on your loan from 25 years to 20. Next I would gather all the specific information on my loan, then change the amount of time left on my loan and determine the monthly principal and interest payment. The loan was originally for $141,000. The interest rate was 5.75% fixed. The principal and interest payment is $822.84. After sixty payments the remaining principal balance is $130,794.68. The new mortgage payment for principal and interest to reduce the remaining years left on the loan from 25 years to 20 is $919.29. Next, add that to the $261.13 escrow for taxes and insurance, and then the total monthly payment is $1,180.42. This would be a monthly increase of $95.44. The formula I used is: PMT = (240, 5.75/12, 130.794.68) where 240 = the number of remaining monthly payments, 5.75/12= the monthly interest cost, and $130,794.68 is the current principal. This would leave less than $5.00 to manage its monthly spending. This would make paying off the mortgage five years faster a bad idea because of the normal everyday unexpected things that happen in life. In order to identify the highest interest rate you could refinance at in order to pay the current balance off in 20 years...
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