Hello all,

In this case study Rebecca Young finds herself in quite the dilemma, to decide if she

wants to keep paying $3000 a month for rent or buy the identical condo next door for $620,000

which she is sure she can get for $600,000. This is not a very simple decision to make as other

factors come in play. In purchasing the new condo, she would have $1055 in monthly condo

fees, she would have $300 in property taxes, and she would have to pay $600 a year for

maintenance. She would also need to consider that she would need a 20% down payment which

would be $120,000, there would also be a 1.5% deed transfer tax, and a 1.5% provincial deed

transfer tax, as well as $2000 in closing fees. Luckily, she was able to find a lender that would do

a ten-year term at 4% and amortize over 25 years. (Cleary & Foerster,2015)

Assuming she does decide to buy the condo and she can get it for $600,000 and be able to

get the 20% down payment ($120,000) leaving her needing a loan of $480,000 that will be at a

fixed rate of 4% for 25 years. With all of the factors laid out for Rebecca she can decide which

would be the best for her in the long run. After analyzing the different scenarios, I believe it’s a

good idea for Rebecca to buy the condo. She is making an investment for her future and if at

some point she decides to move she can then make a choice to sell the condo or rent it out.

References:

Cleary, S., & Foerster, S. (2015). VitalSource Bookshelf Online. Retrieved December 29, 2020,
from https://mbsdirect.vitalsource.com/