FHCE 2100 Lecture Notes - Lecture 10: Finance Charge, Tax Rate, Down Payment

• School: University of Georgia
• Department: Financial Planning, Housing and Consumer Economics
• Course: FHCE 2100
• Professor: Dr.Kabaci

Document Summary

Taxes support of government (required by law you pay taxes and have home insurance) Insurance protection of your dwelling and contents. Note: t & i are held in an escrow account. Objective costs of buying a house property insurance and property taxes. Property insurance: . 25-. 5% of home"s market value per year protect against disasters. Property taxes: . 5-2% of home" s market value per year. Together with principal and interest we have piti. Yes through your rent to help owner pay property taxes (indirectly paying) Objective costs of buying a home: opportunity costs of down payments. Down payment: initial cash payment toward purchase of a house. A shift in assets from one form to another (not a cost per se) Could have used down payment for some other purpose. Down payment price of house * % down. Down payment * rate of return that could be earned in another investment. Objective cost of buying a house: closing or settlement costs.