Base on the following info, how much more does it cost to buy than to rent this home.
Carolyn and Jim are moving to Montanta, for an expected stay of one year. They have 2 children and want to live in a house. They find a nice home which they can either rent or buy.
The landlord is offering a one-lease of $1,050 per month. Renters Ins is $45 per month.
There is a loan fee 2 points (2%) and other closing cost of $1500. They will be added to the mortgage loan.
The amount to be borrowed will be financed at 4.45% compounded monthly over 30 years.
Purchage price is $175,000 with a down payment of 5%.
Property tax on the home is $1,150 per year, fire & home owers Ins comes to $550 per year and repairs will cost $800 per year.
The income tax rate is 25%.
Assume that they sell the house after one year for $180,000 & pay a real extate fee of 6% on the selling price.
When They sell the home they also pay closing of $1500.
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