Category: Exercise 1 simulation

After completing the home buying simulation I learned that buying and renting a house can be difficult as you need to factor in all of the limitations that are present when purchasing a home. My particular annual gross income was $54,000 with a monthly gross income of $4,500 and a monthly debt of $400 (car payments). With an annual gross income of $54,000 I was able to take out a loan that would allow me to buy a home priced between $ 185,560.68 and 203,855.60. With this information in mind I ventured out on my house hunt to find the perfect house for my family that also included a third grader and sixth grader. Choosing schools in the neighborhoods of Bloomfield, Wethersfield, and Hartford were important factors in my home search. And after close evaluation of homes and schools I decided on a home in Hartford, CT. The address of the home I decided on is 114 Cumberland Street, Hartford, CT 06106. At this home I am paying $934.69 in mortgage and after one year I will have paid $52,220 in interest alone with an interest rate of 4.25% over 30 years. My home was on the market for $190,000, which was under my max budget of about $203,000. With my home being under budget I was able to use the rest of the money for separate expenses such as gas for my car that would take me to and from work and my children’s school.

My new home has 3 bedrooms and 1.5 baths, giving my children enough space and their own rooms for privacy. One of my main focuses was finding a home that provided my children with the chance to attend the same school that was in close proximity to my home. The perfect choice, in my opinion, for school for my children was MD Fox Elementary School, which is only 1.7 miles away from my home. This school is also at a +4 test gain across grades. My work schedule goes well with the public school hours and I can easily drop off and pick up my children from school each day.

I was also able to find three other potential homes: 36 Greenwood Ave. Bloomfield, CT 06002, 42 Alexander Rd. Bloomfield, CT 06002, and 6 Railroad Pl. Wethersfield, CT 06109. Although I was looking to buy a home I also took a look at homes to rent to see if I was interested in investing in renting. The four homes I considered were Hampton St. Hartford, CT 06120, 1085 Blue Hills Ave. Bloomfield, CT 06002, 15 Hawthorn Ave. Wethersfield, CT 06109, and 480 Hartford Ave. Wethersfield, CT 06109. After close looks at each home I decided that 114 Cumberland Street, Hartford, CT 06106 was my best choice, the school is close to my home and my job is fairly closer to this home than any of the others as well. This home was the perfect choice for my family, and my children enjoy their own rooms as well as the spacious back yard in our new home.

For the home and school buying simulation, my profile fell somewhat towards the middle of the pack. I had an annual gross income of $42,000,  a $10,000 savings, ownership of a vehicle and monthly debts of $400. This gave me a net monthly income of $3,100. According to CNN, this level of income allowed me to search for a home in the price range of $117,381-$131,610 and a monthly mortgage payment of $530-$600.

While searching for homes, I looked primarily in West Hartford and Wethersfield. I settled on a condo in the east end of West Hartford, located at 90 Kane st. This property was selling for $128,000, which was at the high end of my budget but still a realistic option. At this price, my monthly house payment would be around $590 a month. If I was to take out a 30 year fixed mortgage at 4.25%, I would end up paying $92, 440 in interest by the time the principle was totally paid off. Compared to the $128,00 price tag of the property, this is unquestionably a large amount of interest.

My main reason for choosing the Kane st. property was due to the eventual educational benefits. All the properties I could afford in West Hartford were located in the East/Southeast corner of the town which is historically the location of a higher percentage of multi-family houses and affordable apartments. This is partially due to rigid and extremely old zoning regulations established in the town. This has led to a stronger minority presence in this section of town and the elementary schools that service it. The properties I looked into seriously fed into Smith, Webster Hill and Charter Oak elementary schools. All these schools sit around the state average in terms of test scores. However, they all feed into above average middle schools and very strong public high schools. My choice of the Kane st. condo would result in my children attending Smith elementary, King Philip (or possibly Bristow) for middle school and Hall high school.

In the end, I believe this simulation demonstrated that the notion of “escaping” to the suburbs may be exaggerated. Although I do feel that my choice of property would result in strong educational benefits for my children, it would still stretch my budget extremely thin. The presence of numerous magnet schools which perform around or slightly above the state testing average present a good option for those in the Hartford area. However, obviously they are limited in how many children they can accept and for this reason I decided that the move to West Hartford could better ensure quality education through elementary, middle, and high school. There is certainly a limited amount of affordable real estate in Hartford’s suburbs, which could make it difficult to pull off such a move even if a family decided that it was in their best interest.

As a sophomore in college, I never thought I would need to know how to purchase a home for a family and myself.  This exercise gave me the opportunity to simulate the experience of buying a home, and therefore “buying” a school.  To begin searching for a home, I first needed to find out what type of a home I could afford.  I needed a home for my husband, a sixth grader, a third grader, and myself.  After establishing an annual gross income of $66,000, with $5,000 saved for a down payment, and factoring in monthly debt of $500, I discovered that I could afford a home listed between $238,000-$260,000.  To begin searching for a home I searched “Remax.com”, a website that lists homes that are for sale in suburban Hartford.  I found three bedroom homes within my price range that were suitable for my family.  The homes I found were in Bloomfield, East Hartford, West Hartford, and Wethersfield.  I made sure that I could afford the monthly payments, and interest rates that came with these homes.  The homes in Bloomfield, East Hartford, and West Hartford were located in areas that surround many schools, however, I wanted to find a district school because I know that my children would be guaranteed seats in a district school.  In these school districts, I was unable to find a school that both of my children could attend.  I had better luck in Wethersfield.  I found a home located at 22 Fairview Drive with a mortgage $249,000.  It will cost me $1,229 per month.  After one year I will owe $10,539 in interest and after 30 years I will owe $192,668 in interest.  This number is $191,443 over the principle amount, which is very high, and because of this I was not convinced that this would be my best option until I realized that the Wethersfield Public School District offers school that teaches kindergarten through sixth grade, and therefore both my children can attend it.  This school, Charles Wright School, is less diverse than the schools I found in other districts.  It is about one fourth black, Hispanic, or other races, and the remaining students are white (smartchoice).  However, 79% of the students were at or above the test goals in 2012, which is higher than the Connecticut average (smart choice).  Luckily, I do own a car so I can drive my kids to school, but in case I ever could not drive them, the school is only .3 miles away from my home.  Before this exercise, I was unaware of how much interest rates can increase payments on a home.  I also did not know that this much thought went into buying a home.  I now better understand the pressures parents face when trying to buy a home for their families in areas where their children can get the best possible education.

After completing the home buying simulation, I have come to realize that buying or renting a home is a difficult and frustrating process. In the Greater Hartford area, towns such as East Hartford, Manchester, and Glastonbury all are surrounded by magnet and charter schools that benefits children’s educations, yet with lack of public transportation routes throughout the suburbs it can be sometimes challenging to commute to either work or school.
The financial situation that I was placed with was earning an annual amount of $42,000 and debt free. In order to find an affordable house with my monthly maximum being $1,150 I had to shop around the internet to see what the best option was for me and my kids. It was pretty tough finding a home within my price range that had multiple bedrooms and had more than one floor (single floor houses are too small due to my height)! I was able to stumble upon a home in East Hartford, 39 Willys St, which was right in my price range. Highly affordable at $554 /mo, I would have some extra to pay other expenses and possibly a down payment for a used car. Located in a quite, friendly neighborhood would be perfect for my two 3rd and 6th grade children.
Now that a house has been found, I needed to find the best schools around for my children that would provide them with a bus to and from school each day. Personally I’d like my children to attend the best academic school as well as diverse that is around. The Glastonbury-East Hartford Elementary Magnet has the best ratio of Black:White:Hispanic:Other students. Although it is located 4.4 miles from the home residence there the CT Transit bus has a route that takes approximately 29 from home to school. For the 6th grade child, although not as diverse with students other than black, white, and Hispanic the Montessori Magnet School at the Learning Corridor is as well a great school and is in good walking distance at only 2.2 miles from home.

Respectively each school is +5 in test score gains so I am sure that the children will receive some of the top education in the area closest.
To manage a stable living condition in a well being neighborhood and sending your children to a good school can be difficult for a person who doesn’t have the highest income. In order to improve yours and the other lives around you, sacrifices have to be made.