HDFS 357 1st Edition Lecture 13 Outline of Last Lecture I II Consumer Complaints Major Consumer Purchases Outline of Current Lecture I Major Consumer Purchases Cont Chapter 9 I II III IV V Housing Alternatives Renting your Residence Legal Details of a Lease Owning your Residence Steps of Housing Current Lecture LECTURE 13 3 11 15 Phase 4 Post purchase activities o Use and maintain correctly for best performance o Investigate variety of servicing options Leasing o Contractual agreement with monthly payment for use of a vehicle over a set period of time o Pros Lower payments smaller initial cash outlay Able to obtain more expensive vehicle more often o Cons No ownership or equity in the vehicle Extra charges mileage limits condition Chapter 9 The Housing Decision Factors and Finances Housing Alternatives o Personal preferences are modified by financial factors o Spend no more than a third of your monthly take home pay on housing Renting your Residence o Advantages of renting Easier to move Fewer maintenance and repair responsibilities Don t need financing o Disadvantages of renting No tax benefits Limitations regarding remodeling decorating Restrictions regarding pets and other activities Costs including a security deposit and renter s insurance Legal Details of a Lease o Date and amount for late rent payments o List of included utilities appliances o Restrictions on certain activities o The right to sublet the unit o Conditions where landlord may enter the rental unit Owning your residence o Advantages of Owning Pride of ownership American Dream Financial benefits Deduct property taxes and mortgage interest Building equity in home Able to remodel decorate as you wish o Disadvantages of Owning Financial uncertainty Obtaining money for the purchase Home values could drop Limited mobility Can take time to sell your home Higher living costs Home improvements and repairs Real estate taxes Step 1 Determine Your Home Ownership Needs o Assess types of housing available 3 types Single family dwelling Most popular Multi unit dwelling Duplex Twin home Condominium You own your unit in a building of units Association fee Step 2 Find and Evaluate Property to Purchase o Decide if you want to use a real estate agent o Select a location to search for housing Be aware of zoning laws and covenants School system