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C H A P T E R 9
HOME IS WHERETHE MORTGAGE OR LEASE IS
Chapter Resources: Want to know when the cost of renting exceeds the cost of buying? There are many excellent rent vs. buy calculators online. Zillow has a good one that is easy to use and includes an explanation of the calculation (www.zillow.com/rent-vs-buy-calculator); MichaelBluejay allows manipulation of variables (michaelbluejay.com/ house/rentvsbuy.html). Realtor.com has lots of interesting articles and advice on all things real estate, much of the advice geared toward young renters. Learning Goals By the end of this chapter you will be able to: • Compare different types of residential real estate • Describe the basic steps to purchase a home • Describe how a mortgage works • List four ways that personal wealth can be built through homeownership • Summarize common provisions of a rental agreement • Tell what a renter must do to earn financial benefits comparable to homeownership • Use a rent vs. buy calculator to determine when the cost of renting a home exceeds the cost of buying • (Opt.) Argue for or against rent control vs. free market rent
PRODUCT PREVIEW
O ne day, in the not too distant future, you will graduate college or career tech school, and be living on your own. You’ll get older, move up in your career, and maybe even start a family. Where will you live? Have you ever thought about your future home? Do you envision yourself as a homeowner or renter? What is your opinion about owning a home vs. renting? Housing costs make up the single largest component of household spending. Choosing between owning your own home and renting is an important financial decision because, although buying a home usually requires taking on a significant amount of debt, owning a home has a serious impact on your wealth. Let's explore housing options and how homeownership (or the lack thereof) impacts your ability to build wealth and financial security.
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