Home buying process and its financial impacts Essay

Home buying exploit and its financial impacts - Essay eventBuying a sept substructure be the commodiousst amount invested or spent upon any asset by the exclusive and so a protective(predicate) investigation is necessary about the pros and cons of a plaza buying process 1. What are some common opportunity costs associated with the selection of lodgment? charm selecting a house which an individual wants to buy he/she takes into consideration the apartment or the house first and then the individual also takes a advert at the residential area in which he plans to dwell. However selecting the option of housing means that the individual has to bear some underlying costs or in some cases has to permit out some opportunities in his/her way. In one word it can be termed as opportunity costs undergone during the process of housing. While buying a house it is compulsory that a fair amount needs to be given out as down payment. The individual has to pay a considerable sum of money a s security deposit even with the consideration of renting an apartment. In both the cases one has to let out the savings interest that could have been earned the money being kept in a bank. The brokerage fee is another cost twisty looking for a house which could have been spent elsewhere. If the house selected is few miles away from the workplace the individual has to take the pain of a long journeying every day. In case the individual is renting a house he is losing out the advantages of tax obtained from buying a house. But at the comparable time the person has to bear sufficient trouble to build a house of his choice and needs (Kapoor, 2009, p. 272). 2. What are the advantages and disadvantages of owning a home? Home will power has been considered as the rational form for housing with more than 70% of the British households having houses in their list of assets. Such ownership statistics for the year 1991 reveal 59% for the States and 40% for Switzerland. Home ownership is ad vantageous as houses are saleable assets. Increasing market value of homes has enhanced this merit. It also eliminates the trouble of monthly lease payments. Statistical evidences suggest that homeowners are much better than individuals renting an apartment. But the disadvantage is that few people have the money for buying a home and they go for borrowing options or mortgage. This is again a liability. Owning a home involves maintenance costs unlike renting where landlord bears all the cost for renting (Gordon, n.d). 3. How can the quality of a school system benefit even homeowners in a community who do not have school-age children? A recent matter has shown that home owners send their teenage children to school more frequently than those parents living in rented apartments. Behavioral characteristics of homeowners have been attributed to this fact. Homeowners are mostly financial stable and from salutary background who do not tolerate bad behavior of their children. Again the fi ndings reveal that residential stability has a positive impact on childrens facts of life. There appears to be a positive relation between homeownership and educational outcomes. Renting individuals may change their houses quite often which in turn mavin to changing schools keeping in mind the distance factor. This is not the case for home owners. Changing schools prove detrimental to a childs education (Social Benefits of Homeownership and Stable Housing, 2010). 4. What factors affect a persons ability to qualify for a mortgage? Any bank or financial institution while mortgaging a house from an individual does a careful assessment of his/her gross income. The amount offered on mortgage depends a lot on the individuals gross income. thence first of all a person needs to be financially stable in order to qualify for mortgage. Sudden inheritance of a large sum of money can also be favorable for qualification. Some institutions also prefer to see the loan history of the individual b efore fully grown out the mortgage amount. This is done to prevent default risks. In recent times many mortgage products have come up in housing markets easing the process of