SOCSCI 2PF3 Lecture Notes - Lecture 5: Mortgage Insurance, Down Payment, Tax Shelter
30 Jan 2017
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Document Summary
Usually the first, major financial decision of your life: high operating costs insurance, gas, maintenance/repairs, short life so process of researching, selecting, buying and maintaining an automobile is a frequently recurrent activity. Lease payment calculation based on: capitalized cost (price) of the car, estimated residual value at the end of lease, money factor (financing rate) on lease, term or length of lease (2-5 years) Choice of leasing a car or purchasing it depends on many factors (e. g. driving habits, lifestyle, ability to afford) Single-family house : popular choice, more privacy and property control, cost have increased dramatically in recent years. Benefits of owning a home : provides personal satisfaction, offers tax shelter, acts as inflation hedge. The cost of home ownership include: down payment, closing costs, mortgage payments. Loan to value ratio = the max % of the value of a property that the lender is willing to loan.
