File size: 3,442 Bytes
8938d1b | 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 | import numpy as np
from typing import Dict, Any
def calculate_tax_comparison(income: float, mortgage_interest: float, property_tax: float,
charitable_donations: float, state_local_tax: float,
child_tax_credit: float = 2000) -> Dict[str, Any]:
# ... (use the existing calculate_tax_comparison function from your code)
# For brevity, I'm not repeating the entire function here
pass
def should_buy_house(income: float, down_payment: float, home_price: float,
interest_rate: float, property_tax_rate: float,
maintenance_rate: float, rent: float,
expected_appreciation: float, time_horizon: int) -> Dict[str, Any]:
"""
Determine if buying a house is financially beneficial compared to renting.
Parameters:
income: Annual household income
down_payment: Available down payment
home_price: Price of the house
interest_rate: Annual mortgage interest rate (as a decimal)
property_tax_rate: Annual property tax rate (as a decimal)
maintenance_rate: Annual maintenance cost as a percentage of home value (as a decimal)
rent: Monthly rent if not buying
expected_appreciation: Expected annual home value appreciation rate (as a decimal)
time_horizon: Number of years planning to stay in the house
Returns: A dictionary with the analysis results
"""
# Calculate mortgage details
loan_amount = home_price - down_payment
monthly_mortgage_rate = interest_rate / 12
num_payments = time_horizon * 12
monthly_mortgage = loan_amount * (monthly_mortgage_rate * (1 + monthly_mortgage_rate)**num_payments) / ((1 + monthly_mortgage_rate)**num_payments - 1)
# Calculate annual costs
annual_mortgage = monthly_mortgage * 12
annual_property_tax = home_price * property_tax_rate
annual_maintenance = home_price * maintenance_rate
annual_housing_cost = annual_mortgage + annual_property_tax + annual_maintenance
# Calculate tax benefits
mortgage_interest = loan_amount * interest_rate # Simplified calculation
tax_comparison = calculate_tax_comparison(income, mortgage_interest, annual_property_tax, 0, 0)
tax_savings = tax_comparison['Difference'] if tax_comparison['Better Option'] == 'Itemized Deduction' else 0
# Calculate total cost of buying vs renting
total_buy_cost = (annual_housing_cost - tax_savings) * time_horizon
total_rent_cost = rent * 12 * time_horizon
# Calculate expected home value after time horizon
final_home_value = home_price * (1 + expected_appreciation)**time_horizon
# Calculate net cost of buying (considering selling the house)
net_buy_cost = total_buy_cost + down_payment - (final_home_value - loan_amount)
return {
"Buy House": net_buy_cost < total_rent_cost,
"Net Cost of Buying": net_buy_cost,
"Total Rent Cost": total_rent_cost,
"Difference": total_rent_cost - net_buy_cost,
"Annual Tax Savings": tax_savings,
"Expected Home Value After {} Years".format(time_horizon): final_home_value
}
# Example usage
result = should_buy_house(
income=250000,
down_payment=100000,
home_price=500000,
interest_rate=0.06,
property_tax_rate=0.01,
maintenance_rate=0.01,
rent=3000,
expected_appreciation=0.03,
time_horizon=10
)
print(result)
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