To answer these financial planning questions, I will guide you through a detailed, step-by-step analysis. We will break down the required considerations to determine which housing choice fits within your budget and which option requires a substantial savings amount:
### Step 1: Determine Housing Choices and Criteria
First, let’s outline the possible housing options you might be considering. Generally, housing options include renting an apartment, buying a house with a mortgage, or possibly something else like a co-op or condominium.
#### For Renting:
- Monthly rent payment
#### For Buying (with a Mortgage):
- Monthly mortgage payment
- Required initial down payment
### Step 2: Fit within Monthly Budget
Your monthly budget is [tex]\( \$650 - \$780 \)[/tex]. We need to compare this range to the monthly housing costs.
#### Renting:
If rents are within the range of [tex]\( \$650 - \$780 \)[/tex] per month, then renting fits within your budget.
#### Buying a House with a Mortgage:
To understand if a mortgage fits within the budget, we use a rough estimate formula:
[tex]\[
\text{Monthly Mortgage Payment} \approx \frac{\text{Total Loan Amount}}{number of months} + \text{interest on loan}
\][/tex]
Considering typical loan terms (e.g., 30 years with interest), let's simplify to see if the monthly payments likely fall within the budget range.
### Step 3: At Least [tex]\( \$24,000 \)[/tex] Saved
Here, we consider the savings required for different housing options:
#### Renting:
- Typically, initial payments may include first month’s rent, last month’s rent, and a security deposit. This may range from [tex]\( \$1,950 \)[/tex] to [tex]\( \$2,340 \)[/tex] based on a monthly rent of [tex]\( \$650 - \$780 \)[/tex].
#### Buying a House:
- Down payment is typically [tex]\( 20\% \)[/tex] of the home's purchase price. For a significant saving amount like [tex]\( \$24,000 \)[/tex]:
[tex]\[
\text{Home Purchase Price} = \frac{\$24,000}{0.20} = \$120,000
\][/tex]
So, purchasing a house at or above [tex]\( \$120,000 \)[/tex] requires at least [tex]\( \$24,000 \)[/tex] saved.
### Summary and Answers:
1. Housing Choice that Fits Monthly Budget (\[tex]$650-\$[/tex]780):
- Renting an Apartment: If rents are set between \[tex]$650 and \$[/tex]780 per month, this option fits within your budget.
2. Option Requiring At Least \[tex]$24,000 Saved:
- Buying a House: To save at least \$[/tex]24,000 for a down payment, the housing purchase price would need to be substantial. Therefore, purchasing a house with a home price [tex]\( \geq \$120,000 \)[/tex] requires at least \[tex]$24,000 saved upfront.
Boxes to check based on above analysis:
- Rental fits within the recommended budget
- Buying a house with a mortgage requires at least \$[/tex]24,000 saved
