Homes: Renting and Buying Worksheet

1. Complete the “Rent vs Buy” exercise on the SmartAsset website: https://smartasset.com/mortgage/rent-vs-buy#H5ktHGbUiE

Respond to each of the following in a minimum of 50 words:

· What was the recommendation?

· What were the factors that led to that recommendation?

· Do you agree or disagree with the recommendation? Why?

2. Consider how economic conditions affect your decision to buy or rent (i.e. interest rates, unemployment rate, and inflation).

Explain the benefits and drawbacks of renting versus owning a home.

3. Review Exhibit 7-4 in Ch. 7, p. 225 of Focus on Personal Finance.

Summarize in at least 100 words the steps in the home-buying process.

4. Review Exhibit 7-6 in Ch. 7, p. 230 of Focus on Personal Finance.

Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. Show your calculations in the table below.

· Monthly gross income: $2,950

· Other debt, monthly payment: $160

· Down payment to be made: 15% of purchase price

· Monthly property tax and insurance: $210

· 30-year mortgage at 6%