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Purchasing A Home versus Renting A Space Step 1: Identify a home in your area (or...

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Finance

Purchasing A Home versus Renting A Space

Step 1: Identify a home in your area (or wherever you'd like tolive).

Step 2: Based on the price of the home, determine how much itwould cost you on a monthly basis to purchase that home. Yourpayment will consist of Principal, Interest, Taxes, and Insurance(PITI).

Note: Use current 30-year interest rates; Assume 5%-10%downpayment; The "insurance" in the PITI is not property coverage,it is insurance to protect the lender in case you default on theloan.

Step 3: Identify a comparable rented space and compare that costto the monthly cost in Step 2.

Step 4: Give the comparison in an Excel spreadsheet or Wordfile.  

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Answer & Explanation Solved by verified expert
4.4 Ratings (802 Votes)
Please see the table below Please be guided by the second column titled Linkage to understand the mathematics The last row is your answer Figures in parenthesis mean negative values    See Answer
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Transcribed Image Text

Purchasing A Home versus Renting A SpaceStep 1: Identify a home in your area (or wherever you'd like tolive).Step 2: Based on the price of the home, determine how much itwould cost you on a monthly basis to purchase that home. Yourpayment will consist of Principal, Interest, Taxes, and Insurance(PITI).Note: Use current 30-year interest rates; Assume 5%-10%downpayment; The "insurance" in the PITI is not property coverage,it is insurance to protect the lender in case you default on theloan.Step 3: Identify a comparable rented space and compare that costto the monthly cost in Step 2.Step 4: Give the comparison in an Excel spreadsheet or Wordfile.  .

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