Hive years have passed and Jamie Lee, 34, is considering taking the plunge-not only is she engaged to be married, but she is also deciding on whether to purchase a new home, Jamie Lee's cupcake caf is a success! It has been open for over a year now and has eamed itself rave reviews in the local press and from its regular customers who just cannot get enough of her delicious varieties of cupcakes. One such customer, who stopped by on a whim in the cafe's first week of business, is Ross. After a whirlwind courtship. Ross, a self-employed web designer. proposed, and famie Lee agreed to be his wife. The bungalow that Jamie Lee has been renting for the past five years is too small for the soon-to-be newlyweds, so Jamie Lee and Ross have found a brand new three-bedroom, 221 bath home in a quiet neighborhood for $283,000. Their neighborhood's homeowner's association dues would be $540.00 a year. After paying a year's worth of house payments, their equity will be $5,850. Based on Jamle Lee and Ross' income, they fall into a 20% tax rate bracket. Use this payment information along with the information below to compare the costs of renting and buying a house. incerest lost on oown paymenticiosing costs Mortgage interest paid in first year 3000 Estieated annual approciation $13,390 $2,900 Rental Costs Monthly rent $700.00 Annual rental payments (monthly rent 12 ) Renter's insurance Interest lost on securty deposit (deposit savings account interest rate) Total annual cost of renting \begin{tabular}{|rr|} \hline$ & 8,400.00 \\ \hline$ & 7000 \\ \hline$ & 3.33 \\ \hline$ & 8,473.33 \\ \hline \end{tabular} Buying Costs Annual mortgage payments Property taxes (annual costs) Homeowner's insurance (annual premium) Estimated maintenance and repars Altor tax interest lost because of down payment/closing costs \begin{tabular}{|rr|} \hline$ & 16,257.96 \\ \hline$ & 3,367.70 \\ \hline$ & 540.00 \\ \hline$ & 2,830.00 \\ \hline$ & 680.00 \\ \hline \end{tabular} Less: Financial benefits of homeownership Growh in equity Tax savings for mortgage interest (annual mortgage interest tax rate) Tax savings for property taxes (annual property taxes tax rate) Estimated annual appreciation Total annual cost of buying