John would like to move from the city into the suburbs and has been saving up a large down payment for a home. Which is the most cost effective way for John to buy a house in the suburbs?
AMove to the suburbs and rent a house for one year before purchasing a home.
BBreak his lease once he has bought the perfect home.
CFinish the term of his apartment lease in the city and find a new home to purchase simultaneously.
DBreak his lease and move to the suburbs immediately without identifying a home to buy.

Respuesta :

Option C would be the most cost effective.

Breaking his lease is not a viable option because he may still have to pay for the remaining months on his lease and legal action could be taken against him, which will cost him attorney fees. More so, his credit report could be negatively impacted. That strikes out options B and D

Option A is not a viable option because he has large down payment savings already to purchase a home in the suburb. Renting a house there for the first year may deplete his savings. Why should he pay a landlord for a year when he has enough savings to make a down payment for the purchase of his own property?

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