Answer:
1
Explanation:
a. Let calculate the cost to rent
Buying Costs equal $7,380
Rent equal $9,800
Mortgage payments equal 145 Insurance equal $2,830
Since taxes, insurance, maintenance 39 Interest lost on security deposit and 270 Interest lost on down payment, with a closing costs of -225
Growth in equity equal 1,700
Annual appreciation equal 2,681
Tax savings for mortgage interest of 498
Tax savings for property taxes
$ 7,564
Total rental costs
$ 7,796 Total buying costs
Interest lost on security deposit = $650 × 0.06 = $39
Interest lost on down payment and closing cost = $4,500 × 0.06 = $270
Tax savings for mortgage interest = $9,575 × 0.28 = $2,681
Tax savings for property taxes = $1,780 × 0.28 = $498
(b) cost of renting is less than cost of buying, if cost is the only criteria, renting is better.
