You bought your house for $350,000 ten years ago and now it needs repairs (you pay...

You bought your house for $350,000 ten years ago and now it needs repairs (you pay property taxes of $3,000 per year). You consult a renovations company and it quotes you $40,000 to fix everything. You are thinking about simply selling your house (no repairs) for $425,000 and buying a bigger one for $610,000 (property taxes of $3,200 a year). You would be paying $1,100 a month in interest to the bank, but also collecting $800 rent from a tenant. In five years, you think you will be able sell your current house for $475,000 (with repairs completed). Also, in five years, you expect the new house to be worth $635,000. Assuming a five-year time frame, which is the better option for you?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

You bought your house for $350,000 ten years ago and now it needs repairs (you pay...

You bought your house for $100,000 ten years ago. Home values in your neighborhood have increased...

You bought your house for $100,000 ten years ago. Home values in your neighborhood have increased about 4% a year. Which table would you use to determine the value of your house today?

You bought your house five years ago and you believe you will be in the house...

You bought your house five years ago and you believe you will be in the house only about five more years before it gets too small for your family. Your original home value when you bought it was $500,000, you paid 10 percent down, and you financed closing costs equal to 3 percent of the mortgage amount. The mortgage was a 25-year fixed- rate mortgage with a 5 percent annual interest rate. Rates on 30-year mortgages are now at 3...

1. You bought your house 5 years ago, and your original home value when you bought...

1. You bought your house 5 years ago, and your original home value when you bought it was $450,000, you paid 20% down and you financed closing costs equal to 4% of the mortgage amount. The mortgage was a 30-year fixed rate mortgage with a 6.5% annual interest rate. Rates on 30-year mortgages are now at 5% if you pay 2 points upfront. Your refinancing costs will be 2% of the new mortgage amount (excluding points). You won't finance the...

4 years ago you bought a home for $350,000, which at the time was 4.5% below...

4 years ago you bought a home for $350,000, which at the time was 4.5% below the home’s fair market value. Since then, the market value of your home appreciated at a compounded rate of 2.3% annually, on average. What is your current equity in the home if you were to sell it at a fair market value today? Assume that when you purchased the home you took a $270,000, 4.5%, interest-only mortgage and always made the minimum required payments....

When you bought your house for $300,000 5 years ago you took out a $250,000 mortgage...

When you bought your house for $300,000 5 years ago you took out a $250,000 mortgage with a 30 year ARM at 5%. Today is the five year anniversary and the rate adjusts to 10%. What is your new mortgage payment?

A person bought a house for $350,000 with closing fees of $1,000. Three years later, the...

A person bought a house for $350,000 with closing fees of $1,000. Three years later, the house was sold for $472,000 with $1,200 in closing fees and a real estate broker’s fee of 3% of the selling price. What average annual rate of return was realized on the investment?

Three years ago, you bought a house. You took out a $350,000.00 mortgage at 4.75% for...

Three years ago, you bought a house. You took out a $350,000.00 mortgage at 4.75% for 30 years. Now that interest rates have fallen (beginning of year 4 of your current mortgage), you are considering refinancing your existing loan with a new 30 year loan. Your new loan must pay off the remaining balance of your old loan plus pay for all of the fees, associated with the new loan. In addition to all of the standard fees, you choose...

You bought a house two years ago and the hot water heater just died. You are...

You bought a house two years ago and the hot water heater just died. You are considering replacing it with an updated version of the same model, which would cost you $200 including installation. Your family consumes about 110 gal of hot water daily, which costs you $230 in utilities each year. The new tank comes with a 20-year guarantee, and at the end of that time, you assume it would be discarded and a new version installed, so zero...

You bought a house 8 years ago with a $250,000 mortgage. It was a 15 year loan with

You bought a house 8 years ago with a $250,000 mortgage. It was a 15 year loan with monthly payments which will pay off the loan when you make the last payment. The interest rate was 6%. What are your monthly payment and your current loan balance? How much interest will you pay in the upcoming year?

Subjects