Free Housing Assignment Research Paper Sample
Home buying is something that many of the most ambitious persons always look forward to buying. The process of acquiring a home is a task that is seemingly simple, but in the real sense, it may end up being a nightmare if not well thought of and properly planned. There is involvement of calculations and considerations for one to figure out an ideal house one is to buy. These factors are readily available in very many forms. The information about buying a house and all significant things that are to be considered is available on the internet. It is also found in books, in newspapers, magazines, on television shows and all other forms of the mass media (Carlyn 461).
I am a university student in the final year at school. I am pursuing a bachelor's degree in Computer Science, majoring in software development. I am an associate at a small software development firm in Miami. I teamed up with my colleagues at my class a year ago, and we have been in business for the last 23 months. The business is good at the moment and in those short 23 months I have already bought a small condo, worth $23,000. At the moment, I live in this condo with a sibling. I plan to purchase a house in 5 years’ time. I envision my ideal home to be a well-located big bungalow near the sea shore. In this chamber, I can raise a family (Foxall 47).
A career in Software development is very lucrative and according to (Forbes, 2014); expert software developers make an average of $220,000 per year. I am already an intern at Microsoft Inc. and after my graduation, I will be in line to get employment there. The ordinary yearly salary for a fresh graduate at Microsoft is about $35,000. However, with hard work, determination and accumulated experience, the wage scale rises fast and in 5 short years that can quadruple. The projections from the small firm that we jointly own shows that we will be a million dollar company if it grows at the current rate of 8% annually. The income from the enterprise will have risen significantly. My stake in the company is 33%, and an excellent calculation shows that I will be making something close to a $100,000 annually by year 5. Additionally, after my graduation later in the year, I will have qualified to get a 15% dividend settlement from a family business that ranges between $24,000 and $33,000 annually. All these figures mean that in five years, I will be receiving a conservative value of $ 250,000 per year. Five years from now, I will be in a good position to buy a house.
There is my ideal type of bungalows whose construction is underway in East Miami. They are located on the sea shores, and they are available for booking. The bungalows have a total floor space of 45,000 square feet, and they are constructed and designed using the latest power conserving and green housing concepts. Each unit costs $2 million but are available for mortgage. The Houghton Mifflin Company has published the projected mortgage calculations for the next five years, and it, therefore, possible to make the estimates based on hard figures (Blythe 20).
It is very evident from the case description above that my income will grow with time. Therefore, it means that my ideal house would be that which can give me a longer mortgage settlement period so that I can have less monthly payments to make. A good calculation shows that I am capable of paying for the house for a period of 20 years. It means that if I approach my banker Barclays Bank, they will get me the house, and I will pay for the house. To settle them, I will pay for the house at a static interest rate of 15.5%. Thus for 20 years, I will make a $1283.30 per month, which translates to $154000 annually. This is still less than the 25% of the total income that should be ideal for mortgage servicing (Bunn 39).
The bank will lend me the money because my FICO score is an ideal one. I have already had some $80,000 in my savings account for closing costs. Secondly my front end ratio in five years will be good and in fact, it will be good two years shy of the five-year mark. The total annual income for the third year will be $170,000.
The other aspects, to consider, is that I have no other major payments like car payments and student loan payments to service for they are all already taken. Meaning my take home pay will only be deducted the house payment costs only. That satisfies the back in ratio method.
Finally, as earlier stated, the calculations of the various components of the mortgage are:
Principal – 2,000,000
Property Tax – 13%
Home owner insurance – 700,000 (42% of the principal plus some additional costs)
In conclusion, the process of home ownership is a very intricate one, and it needs a lot of planning. Through the background that this analysis has alluded that the process can be made more manageable (Blythe 48). Housing is an important necessity for every person in the world. A clear and simple process for acquiring a house makes live comfortable.
Blythe, Jim. Consumer Behavior. U.K., Thompson Learning, 2008
Bunn, Michele. "Taxonomy of Buying Decision Approaches". Journal of Marketing (American Marketing Association) 57 (1): 38–56. doi:10.2307/1252056. Retrieved 9 February 2013.
Carlyn, Marcia. “An Assessment of the Myers-Briggs Type Indicator.” Journal of Personality Assessment. 41.5 (1977): 461-73.
Forbes (2014), Home Ownership Figures for The Next 5 Years and what You need to Know. forbes.com.
Foxall, Gordon. Understanding Consumer Choice USA, Palgrave Macmillan, 2005
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