Purchasing Real Estate: Checkpoints

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CheckPoint The purchase of a new house is a long term investment, with long term ramifications and consequences. The final decision is influenced by a wide array of elements, including economic traits such as: -The overall strength of the economy -The mortgage interest deduction, and -The policy changes implemented by the government. The overall strength of the economy generates both marginal costs, as well as marginal benefits in the decision to purchase a real estate property. Some of these costs and benefits of a strong economy are revealed through the table below: Marginal costs Marginal benefits High interest rates which impact the cost of loans and mortgages Inability to get a good deal on a price, as prices are stable and stagnant Increased stability of prices and decreased risk of speculative operations within the real estate market Stable prices of property and ability to resell the property without registering loss Aside from the state of the economy, the decision of whether or not to purchase a house is also influenced by the costs of mortgage, which is in turn influenced by a tax deduction on mortgages. This tax deduction was introduced in early twentieth century and has, since then, become a commonly used and favored tax deduction in the United States. It virtually states that for the mortgage interest paid, the citizens do not have to pay tax to the federal institution. Its application is however questioned by some and efforts have been

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