Math 1050 – Project Part 3 Group 1 Kaitlin Brady, Nicholas Klco, Cory Shumway, Amanda Wallace, & Krissie Wilson

C Careers & Starting Salaries Kaitlin Brady – Actress $73,593 Nicholas Klco – Mechanical Engineer $60,000-70,000 Cory Shumway – Physical Therapist $60,000 Amanda Wallace – Health Care Administrative Manager $52,870 Krissie Wilson – Elementary School Teacher $33,004

Reasons to Rent Renters insurance is less expensive Repairs and maintenance covered by landlord Flexibility to down-size or up-size after lease ends Does not require a large down payment Housing market is unstable (property values decreasing rapidly) If you live in a very expensive area (Hawaii, Manhattan, San Francisco, etc.) Rental rate is fixed during time of lease Access to amenities such as gym, pool, & hot tub Potential job relocation Ability to get out of lease earlier if needed (paying extra)

Reasons to Buy Helps build better credit Mortgage interest tax deductions Property tax deductions Builds home equity which can be used for lower cost loans If interest rates are low If housing prices are low Ownership gives you the ability to landscape, decorate, or remodel to your own tastes Stability and security Greater voice in community affairs as a homeowner

Our Conclusions There is not a “one size fits all” solution when it comes to choosing whether to buy or to rent. Each person has to carefully weigh their own situation and ask questions such as:  Are my finances in order?  How much money do I make?  How much debt do I owe?  Do I have a good credit score?  Do I have a down payment?  Realistically, what kind of monthly payment can I afford?  Is my job stable or is there a possibility of relocation?  How much house do I actually need?  Am I comfortable being responsible for yard work and home repairs? It is important to recognize that buying a house may be the right decision – but it may not be the right time to do so. You may have to take some time to save a bigger down payment and also pay down your debt. This will put you in a stronger position to qualify for a lower interest rate.

15 Year Vs. 30 Year Mortgage 15 year30 year Higher monthly paymentLower monthly payment Lower interest rateHigher interest rate Will pay less total interestWill pay more total interest Faster payoff time & easier to refinanceGreater Flexibility – not locked into high payment. Can pay extra per month to reduce payoff time Conclusion On paper the 15 year mortgage appears the clear winner. However, due to varying income and debt levels, every home buyer may not be able to afford the higher payment. For this reason, we’re calling this battle a draw!

Benefits of paying $100 extra per month toward mortgage More money towards principal Your mortgage payment in the beginning is made up of a high interest and a small amount of principal, so by sending more principal (aka an extra $100) this helps lower the amount of interest you have to pay on every other payment, freeing more money to go towards principal as time goes on. Lower Interest By keeping your lender’s money for a shorter period of time you automatically decrease your interest. Faster Payoff Paying more money will automatically speed up the payment process towards your house. This will eventually mean more money in your pocket.

Group Contributions Provided text for “Reasons to Rent” & “Conclusions” slides– Nicholas Klaco Provided text for “Reasons to Buy” & “Conclusions” slides – Kaitlin Brady, Cory Shumway Created Powerpoint presentation, provided text for “15 vs. 30 Year Mortgage” & “Conclusions” slides – Amanda Wallace Provided text for “Benefits of paying $100 extra” & “Conclusions” slide – Krissie Wilson All group members were involved in choosing the areas of focus for this presentation.