| Course | FIN 250 Personal Financial Planning |
|---|---|
| Module | Module 6 |
| Paper type | undergraduate discussion post comparing renting and buying a home |
| Length | About 390 words, 3 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | AS in Finance |
| Updated | October 2026 |
Free sample paper for FIN 250 Module 6
Module Six Discussion
A $389,000 House Against $1,750 Rent
Kayla and Marcus have been touring houses since they learned they were expecting, and they fell for a three-bedroom ranch near Kayla's clinic listed at $389,000. They currently pay $1,750 a month for a two-bedroom apartment. Marcus's view is that rent is "throwing money away." I priced both options using a current 30-year fixed rate of about 6.5 percent.
They have little saved, so the realistic loan is FHA with 3.5 percent down, or $13,600. The loan would be about $375,400, with principal and interest of about $2,370 a month. Property taxes near 1 percent of value add about $320, homeowners insurance about $110 and FHA mortgage insurance about $170, for a total near $2,970. Setting aside 1 percent of the price a year for upkeep adds roughly $320 more. Owning would cost about $3,300 a month against $1,750 for rent, a gap of over $1,500. In the first year only about $4,200 of the payments would reduce the loan; most of the rest is interest, taxes and insurance.
Cash matters as much. With the down payment and closing costs of about $10,000, they would need roughly $23,600, and they will have $5,000 in savings by December. Buying now would mean no emergency fund, a growing card balance and a payment that childcare would make impossible.
None of this means owning is a bad idea for them later. Goodman and Mayer (2018) find that homeownership has historically been a meaningful way for middle-income families to build wealth, partly because a mortgage acts as forced saving. Sinai and Souleles (2005) point out that owning also protects a family from rising rents if they plan to stay put. But both benefits depend on staying long enough, and recent national data show high prices and rates pushing the cost of owning well above renting in many markets (Joint Center for Housing Studies of Harvard University, 2024). For the Dunbars, the better plan is to rent for about three years, pay off the card, let Marcus's credit recover and save $30,000 toward a down payment, so they can buy with less mortgage insurance and a cushion intact.
How long would you need to stay in a home before buying made sense where you live, and what would you do with the difference if renting were cheaper?
References
Goodman, L. S., & Mayer, C. (2018). Homeownership and the American dream. Journal of Economic Perspectives, 32(1), 31-58. https://doi.org/10.1257/jep.32.1.31
Joint Center for Housing Studies of Harvard University. (2024). The state of the nation's housing 2024. Harvard University.
Sinai, T., & Souleles, N. S. (2005). Owner-occupied housing as a hedge against rent risk. The Quarterly Journal of Economics, 120(2), 763-789. https://doi.org/10.1093/qje/120.2.763
What the FIN 250 Module 6 instructions ask for
The Module Six discussion in FIN 250 usually asks whether renting or buying makes more sense for you or a sample household, sometimes with a request to use a rent-versus-buy calculator or to discuss mortgage types. A strong post compares full monthly costs for both choices, including property taxes, insurance, mortgage insurance and maintenance, and considers the cash needed to close, how long the household expects to stay and what buying would do to its other goals. It reaches a clear answer for this household rather than a general verdict on homeownership. Check whether the prompt wants a decision for you or for a case household, and whether it names a calculator to use.
How this FIN 250 Module 6 discussion example is built
The post prices a three-bedroom house near Kayla's clinic at $389,000. With an FHA loan and 3.5 percent down, the loan is about $375,400 at 6.5 percent, so principal and interest come to about $2,370 a month, and taxes, insurance and mortgage insurance bring the total to about $2,970, before roughly $320 a month of upkeep. Rent is $1,750. Buying now would also require about $23,600 at closing, more than the couple has. The post concludes they should rent for about three years while they clear the card and save a down payment. It closes by asking classmates how long they would need to stay before buying made sense where they live.
Where the FIN 250 Module 6 rubric puts the points
Instructors usually grade this discussion on the accuracy of the cost comparison, consideration of non-monthly costs, attention to the household's time horizon and goals, a clear conclusion, use of course concepts or sources and responses to classmates. Posts that score well include taxes, insurance, mortgage insurance, maintenance and closing costs and connect the choice to savings and debt. Posts lose credit for comparing rent only with principal and interest, for assuming that buying always builds wealth and for skipping the cash needed to close. Some instructors also reward posts that state the assumptions behind the numbers, such as the rate, tax rate and maintenance figure used.
FIN 250 Module 6 help: the mistakes that cost points
Many students compare rent with the mortgage payment alone and conclude that buying is cheaper. Add taxes, insurance, mortgage insurance and about 1 percent of the price a year for upkeep, then count closing costs. Think about how long the household will stay, because buying and selling within a few years often loses money after transaction costs. Use a local listing and a current rate so the numbers are real. In replies, ask classmates about their time horizon before agreeing or disagreeing. Say which listing and rate you used and when, since both change quickly. A reply can also run a classmate's numbers again with one changed assumption to show how sensitive the answer is.
Get FIN 250 Module 6 written to your instructions
Send the FIN 250 Module 6 prompt. Your post will price both options month by month, include the costs buyers forget and reach a decision that fits the household. About two days, and we write the first post free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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FIN 250 Module 6 questions, answered
Where can I find a free FIN 250 Module 6 Discussion sample?
This page includes the complete FIN 250 Module 6 post comparing renting and buying a home in Spokane Valley.
What costs should be included when comparing renting and buying?
Mortgage principal and interest, property taxes, homeowners insurance, mortgage insurance, maintenance and repairs, and the cash needed at closing, compared with rent and renters insurance.
What is an FHA loan?
A mortgage insured by the Federal Housing Administration that allows a down payment as low as 3.5 percent but requires mortgage insurance premiums.
How long should you plan to stay to make buying worthwhile?
Often at least five years, because closing costs and selling costs can outweigh the equity built in a short period.
Does buying a home always build wealth?
Not always. Homeownership can build wealth over time, but results depend on price changes, how long the owner stays, the costs of owning and what renters do with the money they save.