A New House
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- Category: Politics
- Date Submitted: 11/27/2012 04:37 PM
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Checkpoint: A New House
Leslie Burns
Axia College
November 18, 2012
The housing market doesn’t really go along with considering marginal benefits and marginal costs. Marginal benefits and marginal costs are concepts that are associated with one more unit. Since the decision to purchase a house usually involves a choice between both purchasing zero, and purchasing one, ALL benefits and costs would be marginal. The concept of "marginal" loses its meaning and importance. The strength of the economy can affect the benefits of home ownership because it would determine the future market value of the home. Since the home is probably the most expensive asset that a person will own, this will affect a person's wealth greatly.
The strength of the economy will affect the costs of home ownership in a number of ways. It will determine the market price that has to be paid at the time of purchase. It will be the most important factor in determining the interest rate, and therefore how much has to be repaid. It will even affect the requirements that banks and other lenders put on qualifying for a home loan, which would affect down payments and interest rates. It will determine whether the person will have enough income to afford the future payments. If the tax deducting were to be removed you will see people not buying as many homes but there are some people out here that live for tax deductions.
When it comes to mortgage some people will not pay down a mortgage to get the tax deduction because, you don't get all the interest back but, a small part of it.
Other changes in government spending and taxes affect my decision because I see it as the government is wasting money and resources so less spending, generally speaking, by the government helps the economy as those resources are allocated in more efficient areas of the economy.
www.businessinsider.com/...mortgage-interest-deduction
www.ehow.com/...federal-government-tax-deductions.html
Leslie Burns
Axia College
November 18, 2012
The housing market doesn’t really go along with considering marginal benefits and marginal costs. Marginal benefits and marginal costs are concepts that are associated with one more unit. Since the decision to purchase a house usually involves a choice between both purchasing zero, and purchasing one, ALL benefits and costs would be marginal. The concept of "marginal" loses its meaning and importance. The strength of the economy can affect the benefits of home ownership because it would determine the future market value of the home. Since the home is probably the most expensive asset that a person will own, this will affect a person's wealth greatly.
The strength of the economy will affect the costs of home ownership in a number of ways. It will determine the market price that has to be paid at the time of purchase. It will be the most important factor in determining the interest rate, and therefore how much has to be repaid. It will even affect the requirements that banks and other lenders put on qualifying for a home loan, which would affect down payments and interest rates. It will determine whether the person will have enough income to afford the future payments. If the tax deducting were to be removed you will see people not buying as many homes but there are some people out here that live for tax deductions.
When it comes to mortgage some people will not pay down a mortgage to get the tax deduction because, you don't get all the interest back but, a small part of it.
Other changes in government spending and taxes affect my decision because I see it as the government is wasting money and resources so less spending, generally speaking, by the government helps the economy as those resources are allocated in more efficient areas of the economy.
www.businessinsider.com/...mortgage-interest-deduction
www.ehow.com/...federal-government-tax-deductions.html