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Kim and Dan Bergholt are both government employees. They are considering the purchase of houses in the Washington area about $ 280,000. They estimate monthly expenses for utilities at $ 220, $ 100 maintenance, property taxes are $ 380, and home insurance payments for $ 50. Their only debt consists of car loans require monthly payments of $ 350. Kim gross income is $ 55,000 per year, and Dani is $ 38,000 per year. They saved about $ 60,000 in money market funds, which they won $ 5,840 last year. They intend to use the most for a 20% cost payment and closing. The lender offers a loan of 30 years with a variable-rate initial interest rate of 8% in the 20% cost payment and closing equal to $ 1,000, plus 3 punkti.Enne purchase offer and demand loan, they would have an idea of ​​whether they could afford the mortgage saada.Hinnake Bergholts.Oletame and affordable prices, they are not eligible, what other factors might they consider before purchasing and taking out a loan mortgage? What are the coming changes could present problems Bergholt? Bergholt estate agent said that if they do not care to buy, they might consider renting. repair option would cost $ 1,400 / month utilities plus estimated at $ 220 and $ 25 monthly renter’s insurance. Bergholt think any of them could be transferred to another for the next five years. After that, Dan is perceived that he could leave the Public Service in the private sector. Assuming they remain in the same place over the next five years, Bergholt wonder if it is better to buy or rent a house. They expect housing prices and rents will increase at an annual rate of 3% over the next five years. They expect to earn 5% per year, money market funds. All other prices, including utilities, maintenance and taxes are expected to increase at an annual rate of 3%. After federal taxes, provincial and local, they can keep only 55% töötasu.Hinnake marginal dollar, if it is financially more attractive Bergholt for rent or purchase a home during the holding period of five years. (Suppose the interest rate of 8% of the contract, the monthly interest payments over five years total $ 87,574). Suppose it turns out they move after one year. What is the preferred alternative, after a year? (Interest payments on the first year would equal $ 17,852).

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