Math 1050 Project Part 3 Joshua Funderburk Sarah Hansen Shaleen Teresinski Darrel Woodruff

Renting vs. Buying

Pros to Renting No Maintenance. Appliances already there for you use. No property taxes. Extra’s such as a pool, tennis court, gym, etc. Can establish credit. Don’t like your neighbors, easier to pick up and move. The yard is taken care of.

Cons to Renting No storage space Rent can be raised. Can’t hang pictures When you pay rent your money isn’t going towards anything. Rent can be just as much if you were paying a mortgage. Sometimes not a lot of parking. Hard to find places that accept pets.

Buying a Home Pros Earning equity. Tax benefits Maintenance choices Stability Homes are passed on for generations Flexibility to have pets You can remodel anytime you want.

Cons to Buying a Home Can’t just pick up and move on short notice. If things break, you fix them. Maintenance of the yard. Pay property taxes. Coming up with down payment. No amenities

Residential 2003 Home $129,900

30 Year Loan Pros Payments are lower If on a tight budget, this type of loan is for you. Afford a bigger home This loan makes it possible for someone to afford a home in the first place. Cons In the end paying more interest. Payments are lower. First year paying on interest only not on your loan. Might have to work after retirement to pay for your home.

15 Year Loan Pros Lower interest rate compared to 30 year loan. Building equity in your home faster Paying less interest of the duration of the loan. Greater percentage of your payment is going to principal. Cons Your payments are higher Can strain a limited budget. Could run the risk of losing your home. Could limit you to buying a smaller home.

Paying More on Your Loan The less interest you have to pay. Goes straight to Principle Cuts your loan term. Depending how much extra you pay each month. It doesn’t matter how much extra you pay, every little bit counts. $50, $100 or more it helps significantly.

Shaleen’s Comments The insights I learned from this project is that it is possible to pay off your loan earlier than planned.  Just because you have a 30 year mortgage, doesn't mean you will be paying it for 30 years.  It will work in your favor if you can pay a little (or a lot) extra each month, or even at all.  If not, at least you can calculate when your last payment will be. The bottom line is that buying a home is a HUGE commitment, but to most people, the pros outweigh the cons.

Josh’s Comments I learned a lot from this project. Having never bought a home, or even considered it, I can take this information and apply it later in life when it comes that time. I learned that a fifteen year loan is favorable because the loan term is smaller and the total interest paid is much smaller, but that all comes down to if my budget allows. It is even more favorable to pay extra monthly towards your loan because it goes straight to principle and cuts your total interest paid and loan term. If my budget didn't allow a 15 year loan payment, I wouldn't shy away from a 30 year loan. I think in the long run, buying is better than renting because your money is going towards something. The biggest thing that can be taken from this project is that renting vs buying, 15 year vs 30 year, all comes down to each individual's situation.

Darrel’s Comments When I bought my house I wish I would have had some of this information because we were totally clueless on how to go about it. We didn’t know the different types of loans. We relied mostly on the information from the loan company and realizing that some of the information was left out or we had not asked the right questions, so this information was not available. Since then we have refinanced and took the 15 yr loan and it has not made that much of a difference in our budget but have more equity in the house than the 30 yr loan

Sarah’s Comments I have never experienced buying a home and having to deal with this. This assignment has helped me learn about the 15 to 30 year loans. Everyone's situation is different and what they can afford. I would rather have a 30 year loan then paying rent to someone and not have my money go towards something. I can relate this to buying a car in a way. You can go into debt severely if you don’t budget for payments here and the interest rate also. I had a six year loan for my car and was hoping to pay it off faster. Unfortunately though I had to refinance to pay for a surgery I needed. It took me longer to pay off my car, but it lowered my car payment. You have to weigh your options and what is best for your situation. After I refinanced I still paid my car off faster then the bank had figured. By paying a little more money each month you bring your loan down and don’t have to pay as much interest. This applies to a home. You pay more each month, you pay your home off faster.

Natural Disaster vs Your Home

Participation Each person in our group talked about the pros and cons of renting and buying a home. Darrel let me use his project as the example we used in our power point. I took his picture from his project. Darrel shared his experience of when he first bought his home and when he refinanced it also. Josh shared that he has not purchased a home yet but when he does he will take with him what he has learned. Shared that he is not a fan of renting but you do what you can with your resources. When you are more stable with a job, you have a home in your future. Shaleen shared if you pay extra on your house payment you can pay off your loan faster. She mentioned how you can also have unexpected expenses and how it can be hard to make your house payment. All in all, everyone in the group talked about the pros and cons in a 15 and 30 year loan. Pros and cons of renting vs owning a home. Each person shared their own insights and feelings. Sharing personal stories of what they have encountered with buying or renting. Sarah, put the power point together with the help of everyone in the group. I could not have done it without all the information and insight each member in the group has shared. I incorporated pictures into the power point because I am a visual person and just words kind of bore me. We have all learned a great deal with this project and when those of us who have not purchased a home can now benefit from this. Darrel shared how he wished he had known this information before he had purchased his home. We all shared the responsibility and put in great amounts of effort. We are all busy with school and work and I couldn’t be more pleased with how our group banded together and worked through everything.