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Home buying process and its financial impacts - Essay Example
Finance & Accounting
Pages 3 (753 words)
Buying a house can be the largest amount invested or spent upon any asset by the individual and so a careful investigation is necessary about the pros and cons of a home buying process 1. What are some common opportunity costs associated with the selection of housing?…
Buying a house can be the largest amount invested or spent upon any asset by the individual and so a careful investigation is necessary about the pros and cons of a home buying process 1. What are some common opportunity costs associated with the selection of housing? While selecting a house which an individual wants to buy he/she takes into consideration the apartment or the house first and then the individual also takes a look at the residential area in which he plans to dwell. However selecting the option of housing means that the individual has to bear some underlying costs or in some cases has to let out some opportunities in his/her way. In one word it can be termed as opportunity costs undergone during the process of housing. While buying a house it is compulsory that a fair amount needs to be given out as down payment. The individual has to pay a considerable sum of money as security deposit even with the consideration of renting an apartment. In both the cases one has to let out the savings interest that could have been earned the money being kept in a bank. The brokerage fee is another cost involved looking for a house which could have been spent elsewhere. If the house selected is few miles away from the workplace the individual has to take the pain of a long journey every day. In case the individual is renting a house he is losing out the advantages of tax obtained from buying a house. But at the same time the person has to bear sufficient trouble to build a house of his choice and needs (Kapoor, 2009, p. 272) ...
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