Joanne is a teacher. She makes approximately $45,000 a year, nearing the top of her pay scale for being a teacher. She has a fair credit rating (620) and has very little savings (under $2,000). Her job is stable; the world will always need teachers. She has a husband - who is a stay-at-
home dad with an online resale business - and two young children. The family is thinking of maybe having one or two more children and
getting a puppy sometime soon. They are currently renting a house for $1,400 a month but are thinking they may need to move soon if
Joanne gets pregnant. Their current house only has 3 bedrooms and her husband needs one of those rooms for his business use.
Options:
Joanne and her family have the following options.
. Try to purchase a home to fit their future needs. The home would need to include 4 bedrooms, a nice backyard, a den/office area, and a
close elementary school. They will need to have $7,000 down for closing costs and a down payment. The mortgage payment would be
$1,900 a month including home insurance and HOA fees.
• Move to another rental home to fit their future needs. The home would need to include at least 4 bedrooms. Moving to a new rental
home would require them to put down $4,000 for first and last months rent and security deposit. Their rent would increase to $1,800 a
month and include access to a private park with a dog walk/run area and pool.
Question:
Based on Joanne's family situation and financial situation, which option would you suggest to her and why? Use logic and reasoning to back
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