Tom and Nancy want to buy a house in a particular neighborhood. They have two children ages 1 and 4. The average price home in this neighborhood runs about $350,000. Together their family income is $100,000. They have saved $75,000. The home they want to purchase is a newly constructed dwelling that costs $300,000.
Taxes on the home run $3.00 per $100 of assessed value of the home. For new homes the assessed value is equal to 75% of the purchase price. Insurance runs half of one percent of the home‚Äôs assessed value.
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