More handpicked essays just for you.
Renting vs buying compare and contrast
Renting vs buying compare and contrast
Renting vs buying compare and contrast
Don’t take our word for it - see why 10 million students trust us with their essay needs.
The real costs of home ownership
Because of the high prices of homes in the United States, people often focus on only the buying price when considering the costs of owning a house, and neglect many other aspects of home ownership. A house is not your regular item that you buy and store or use for a limited amount of time. Houses come in a package with upkeep costs and taxes, and it’s wise to take these into account when analyzing your finances.
The average cost of a house is estimated to be around $200.000 in 2013. As such, it’s no wonder people are distracted about such a significant amount and overlook other aspects. Owning a house can be exceedingly expensive. Just for the down-payment on the house, which you have to come up with, you’ll be spending an average of 20-25% of the buying price. That means that the down-payment for a $300.000 house can range from $60.000 to $75.000. Thus, you need to be prepared to put down that kind of money if you’re planning on buying.
Let’s take a look at what owning a house can cost you on a monthly or yearly basis.
Mortgage Costs
Most people that decide to buy houses do so by applying for loans. There are two distinct types of mortgages or loans.
The first type implies fixed rates. The advantage of this type of mortgage lies in the fact that you know ahead of time what you’ll be paying monthly. The disadvantage is that while your debt decreases over time, the monthly rate you have to pay remains the same.
The second type of loan has an adjustable rate. These rates are often unpredictable, and even though the initial monthly rates might appear to be lower than with fixed rate mortgages, rest assured, you won’t be paying less in the long-run.
When deciding what you can afford, make sure you inf...
... middle of paper ...
... arise to.
And with these upgrades, your house will gain market value, which also means that the annual insurance fees will rise accordingly. The more your house is worth, the more you will be spending on insurance.
Conclusion
These are only some of the major costs affiliated with owning a house. There are many more. Some of them can be avoided, others cannot. You can save money if you’re planning ahead in most cases. Owning a house comes with costs, there is no doubt about it. Still, you should not be turned away immediately at the thought, after some time, these costs will become routine and can be minimized. The important idea to remember is that you have to keep these costs in mind, or else you’ll be facing issues that you cannot overcome.
Your budget should not be limited to buying a house alone, it should include a large margin for such additional costs.
Whether you are a first time home buyer or a seasoned home buyer, it is important to be aware of the requirements, policies and procedures that could potentially assist you with your home buying needs. As frequently evidenced, the housing rules keep changing. The government keeps proposing new funding programs and the stipulations that need to be met by buyers are ever changing. Staying abreast on these details will help ensure you have a smooth and valuable home buying experience.
In the essay “The Mansion: A Subprime Parable,” Michael Lewis unfolds the real face of the American dream. He talks about his own personal experience in his look out for a house and his struggle with the house he rented. Most Americans have bought houses they cannot afford. Banks offered loans, they have lent mortgages that many don't have enough financial resources to pay them back. Agents have falsely guaranteed that real estate prices will be in constant rise, they promised them that there will be no declination in prices.
Housing can reach incredibly large proportions and have various on-site features such as large pools or perhaps the house has more than two floors. Obviously, only the wealthy class can afford a property with features such as this. Some may view it as unnecessary and excessive to own such a property. Thoreau described his home in “Walden” not having plastering or a chimney. He only used the home to protect himself from the rain and winters. Also there are different types of communities to move into. Housing a century ago was different in that there were only two types of areas to live in. Someone lived in the large and busy cities or in small, quaint homes in the countryside. Also housing was much smaller and it was less expensive for someone to make their own
The cost of housing is high in California. Home prices are much higher than they are in other densely populated states. By 2015, the cost of a typical California home was $437,000, more than double the U.S. average, $179,000 . Besides the high absolute value, the home prices and rents in California have grown
To achieve the American dream is a great accomplishment that requires financial adequacy. Due to financial insufficiencies, owning a home can be difficult, if not impossible for many individuals of lower income. Economic fluctuations often cause inconsistency in housing prices and availability.3 The price of a home correlates to the cost and availability of materials, needed manpower and the duration of construction. These logistical obstacles need to be overcome if the American dream is to be attained by the majority.4 To engineer a faster, more cost effective means of production is a challenge, but for the solution to be well designed and well crafted is a far greater task.
second or third home, purchasing a home can be a challenge. Some people think buying a home
Nothing can make you feel safer than owning a house, provided that buying a home will not result in financial problems of its own. Every year, a new wave of first time home buyers hits the trail in search of their humble abode. There are pros and cons to home buying. Certainly, there is the matter of timing and related financing programs.
Buying a home can be an exciting experience for anyone. However, in some cases you just might be better off continuing to rent your home. There are many advantages to buying a home. However, it is not for everyone and buying varies from individual to individual. Currently more people are leaning towards renting but this could change in the near future.
...ss is hard to qualify in a world where the acquisition of material goods masquerades for success. A home is a material object that exists within a concrete reality. It exists with its own qualities of a house built of materials that do change and degrade over time. The costs of homeownership are harder to dismiss when one becomes disillusioned with the effects of a lack of attention to those costs.
Buying a home is more complex then most think. A purchaser of a home doesn't pay in cash when buying a house. If that were so, then nobody would be able to afford one. A potential buyer must get a loan. The bank doesn't lend their money to just anybody, so there are prerequisites before a buyer should consider buying a home. The potential buyer must have enough money for a down payment which is 3% to 20% of purchase price, a steady job with for at least two years or more, must have a decent credit score with at least a 640 or better. That is standard for the market. (1) The credit score is based on the FICO score. FICO stands for, Fair Isaac Corporation, a company that has been in business since the early 1950's and monitors consumers' credit ratings and put a scoring system on it. (2) Conventional loans are usually financed up to eighty to ninety percent with a down payment required of ten to twenty percent. The potential buyer must also have a debt ratio not exceeding 28/39 of their income. The first number 28 refers to your new mortgage payment that cannot exceed 28% for your gross combined income and 39 refers to your mortgage payment plus revolving and installment debt as well as taxes and insurance cannot exceed 39% of you total combined gross income (3).
The first step to buying your home is assessing your financial situation. A person must evaluate how much exactly they can afford and borrow. Most people hire a real estate agent to find a home. A real estate agent can help in finding different homes that suit the person’s needs. At the Department of Housing and Urban Development’s website, “You'll want to start searching for a broker as soon as you decide to buy a home. Talk to several and find someone you think you'll be comfortable working closely with”(1) Having a wide range of options is always helpful. An agent can also help in negotiating the price, and showing what the potential buyer needs after finding a home. A buyer might also need the services of a lawyer, a loan officer, insurance agents, and an accountant. In all purchasing your own home is a daunting task if you plan on doing it alone.
Often, we paint a picture of our own ideal home in which we dream we’d eventually live in someday. For some, it is easier financially to purchase this dream home and for others maybe if we won the lottery it’s only a dream we’d hope would come true. Some may picture this ideal home to be a huge two or three-story house with lots of land, a pool, and a two-car garage. As for others, maybe something spacious enough for the family yet convenient and beautiful.
Most people, today, are looking forward to buying their first property. When individuals decide to buy a house those individuals would have to look at all their options and all the advantages and disadvantages that come from purchasing a house. The economy plays a huge role in the decision whether people will purchase a house, purchase a condominiums, or rent property.
When valuing the property, the figures should not be the only issue but also the demographic factors and the services offered. When valuing the property, everything within the property should be assessed. The items inside a house should be valued by the size, the cost and the age of existence, this includes the furniture’s and any other utensils that may be available. For items like the computer, the cost and the make are of importance. The car should also be valued if it forms part of the property and the model and the year of make are of essence. The surrounding of the property should also be put into consideration; the geographical location of the property should be put into consideration (Tucker Sundeep, 2006).
In these days, homeowners certainly have a lot of expenses to think about, especially new homeowners. It is best to prioritize what expense should be put up first in the list. The maintenance of the house, maintenance of the garden, Homeowners Association dues and various other expenses are just some of the monthly expenditure a homeowner must consider. There is yet another thing threatening to eat up your hard-earned income. Home intruders, robbers, thieves or burglars or whatever you want to call them.