Rent vs Buy

 

If you are one of the many families who now rent because they believe home ownership is beyond their budget, you may be in for a surprise.  Owning a home is not as expensive as many people think.

INCOME TAX BENEFITS
Under current law, all interest paid on a mortgage incurred in buying a home is  deductible for tax purposes.

EQUITY BUILD-UP
Once you have made rental payments they are gone.  However, with each  mortgage payment, you are buying something tangible, building up your equity.

PAYBACK ON IMPROVEMENTS
Property improvements made by the renter are benefited by the landlord.  But as a homeowner, you can realize some or all of the costs.

TRADE-UP VALUE
If you are not fortunate enough to buy your “dream home” first, owning a home will pave the way to get there.  Depending on the market, you could realize an  appreciation for the down  payment on your next step up.

KEEP UP WITH INFLATION
Although not all homes appreciate at the same rate, real estate has historically kept pace with and usually appreciates faster than the rate of inflation.

IT IS YOURS… and YOURS ALONE
You know the restrictions when you rent.  Home ownership allows you to paint the walls the color you like, improve the floor and window coverings; all without a hassle from the landlord.

Rent vs Buy Comparison

RENT
FOR

EXAMPLE OF
SAVINGS

BUY
FOR

NONE

5% Int. / 30 Year Loan

$350,000

NONE

Loan (P&I) Payment $1,879

NONE

Taxes & Insurance

$325

+ $1,500

Rent

+ NONE

$1,500

Monthly Payments

$2,204

NONE

Monthly Interest $1,458
NONE Property Tax

$275

NONE

Monthly Deductible $1,733
  x .32% Tax Rate

x .32%

NONE

Monthly Tax Savings $ 485
$1,500 Monthly Payments

$2,204

NONE

Less Tax Savings

$485

NONE

Less Principal Reduction

$421

$1,500

NOW COMPARE!

$   1,298

*Based on a loan of $350,000 at a 5% interest rate over a 30 year fixed loan.

 

 

 

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October 28, 2016
by: admin • Listings