Compare two homes based on demographics

Assignment Help Accounting Basics

Reference no: EM132448731

After a number of years of planning, you have made the decision to evaluate the potential purchase of a home. The goal of the assignment is to compare two homes based on demographics, and also to analyze a number of additional factors related to the home-buying process and ongoing possession.

Your Assignment

You will first need to research the housing market and compare the values of two similar homes in two different areas. The two homes must be extremely similar in structure size, land size, year built, and additions such as swimming pools or barns. Then, based upon your findings, you will select one of the homes to purchase, calculate a monthly payment on the mortgage note, compare this information with what you can potentially afford, and address additional questions related to home ownership.

Construct a table showing a comparison of data (including location, square footage, total price, price per square foot, and specifications), for both houses and then write a 3-4-page paper detailing the following:

1. What is the logic for choosing your two ZIP codes? Is the selection based upon work location, family location, good schools, and so on?

2. What is the logic behind choosing the size and specifications of each house?

3. Compare the total price of the two homes.

4. Compare the price per square foot for each house.

5. Compare the demographic data (referring to the location and ZIP code) of each house. Based upon these data, try to explain the similarities and differences in pricing for each home.

6. Select the home that you will purchase and explain the reasoning behind your selection. Assume that at least a 20% down payment is required. How much money would you need to have saved? After the down payment, what would be the purchase price of the home?

7. Assume the following:

Closing costs (including all potential loan origination, title, and closing fees) are $3,500.
You have been approved for a 30-year fixed-rate mortgage note at a rate of 5.0%. Calculate the monthly payment for this loan. (It is recommended that you show your calculation.)

8. Using your textbook readings this week as a resource, and based upon your monthly gross income and current additional debt payments, perform the calculations below (it is recommended that you show your calculations).

Your affordable monthly mortgage payment (assume your lender uses a guideline of 33% for monthly gross income or 38% if you have other debt payment obligations)
Your affordable mortgage amount (meaning the amount that can be financed; assume the loan terms under #7b)
Your affordable home purchase price (assume a 20% down payment). Compare these calculations to the previous data under #6 and #7. What are your conclusions? Discuss your findings, including any surprises!
When purchasing a home, what additional considerations must you take into account? Discuss the parties that will be involved, what type of documentation will be required, home inspection requirements, any additional financing options that you would evaluate, and so on
Present a general summary regarding home ownership. What are the advantages and disadvantages of home ownership, and how does your personal choice fit into your overall personal financial plan?

Reference no: EM132448731

Questions Cloud

Useful in conducting research for your dissertation : How could this tool be useful in conducting research for your dissertation? How could this tool be useful in your current or anticipated job?

Case Study - Organizational Reports to Stakeholders : Case Study - Organizational Reports to Stakeholders. Discuss the basic factors of communication that must be considered in the presentation of this information

Compute the profit margin ratio and gross profit rate : Compute the profit margin ratio and gross profit rate. Caltor Company s assets at the beginning of the year were $770,000 and were $830,000 at the end of year

Discuss direct materials quantity variance : Compute the variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase

Compare two homes based on demographics : Compare two homes based on demographics, and also to analyze a number of additional factors related to the home-buying process and ongoing possession.

Examine FASB financial reporting requirements : Examine FASB financial reporting requirements for a private college. Apply basics of GAAP pertaining to categorizing restrictions on net assets

Analysis of the market structure the industry : An analysis of the market structure the industry - discussion about the demand and supply conditions for your product(s) or service(s)

Information governance reference model : In order to interpret the Information Governance Reference Model (IGRM) diagram. It is recommended that we start from the outside of the diagram.

Calculate the metlock days in inventory : Metlock, Inc. at December 31, 2017: beginning inventory $79000; ending inventory $134000; Calculate the Metlock days in inventory (rounded) in 2017

User Account

All Pages