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Consumer Services |
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Case Study – Financing of Telecommunication Services
Now that you see how the financing works to lower monthly payments for the
purchase of telecom services, look at how you can add the services to your
home.
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Let’s compare two houses for sale. Both houses are identical except
one house, the “HomePort Connected” house, has five years of
telecom services included in the purchase price.
The non-HomePort house has a sale price of $200,000. The
“HomePort Connected” home, which includes $19,894 of
telecom services in the purchase price is selling for $219,894.
The monthly loan payment for the non-HomePort house is $1,136 (100%
LTV, 30 Years, 5.5%). Additionally, the family must pay $332 per
month for their telecom services. Together, their total monthly home and
telecom payments are $1,468. The tax deduction is $230.
The Net After Tax cost is $1,238. This is the cost for
purchasing the home and paying retail for the telecom services.
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The monthly loan payment for the “HomePort Connected” house will
be $1,249 with the telecom services included.
The tax deduction is $253. The Net After Tax cost is $996.
The “HomePort Connected” house is $242 less
expensive per month then the non-HomePort house!
The “HomePort Connected” house gives the family an extra
$242 of cash in the initial month ($1,238-$996), increasing to
$274 per month in year five. The cash increase over five years is
$14,487. Over 30 years the family saves about
$158,270.
If the family deposits their monthly cash-flow savings of $242
into a savings account paying 5.5% interest, at the end of five years, the
family would have $16,412 in savings! If continued for 30
years, the family could realize savings totaling $263,715! By
financing the telecom services in the home, the family paid $3,906
more interest, but received $14,487 in cash savings! Also, the
family has the benefit of no monthly telecom payments for the next five years!
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