In some cases, the total house payment is less than the rent for a similar size and condition home which supports a purchase. However, when you factor in some of the financial benefits like principal reduction, appreciation and tax savings, the difference becomes even more dramatic.
Let’s look at an example of a $250,000 home with 3.5% down payment and a 4.50% mortgage for 30 years. We’ll assume a 3% annual appreciation, 25% federal tax bracket, $1,200 annual maintenance and current rent of $2,100 a month.
The total house payment with property taxes, insurance and mortgage insurance premium would be $1,834 a month. Once the principal reduction, appreciation, tax savings and maintenance have been considered, the net cost of housing is about $673 a month. It costs a tenant over $1,400 more a month to rent than to own which would amount to $17,000 in the first year alone. That’s almost twice as much as the down payment to get into the home.
In this example, the down payment of $8,750 grows to almost $94,000 in seven years due to appreciation and amortization of the loan. Owning a home is one of the few investments available that allow these personal and financial benefits.
One of the obstacles in the past five to seven years has been a borrower’s inability to qualify for a mortgage but new programs and relaxed requirements have allowed more people to be eligible for mortgages. The important step is to talk to a trusted mortgage professional very early in the home search process. Your REALTOR® can make recommendations based on experience from actual closed transactions.
Use the Rent vs. Own calculator to see what the benefits might be in your price range.
Has your home value gone up in the past 6 months? Click here for a Free INSTANT Report !
Wendy Huang, MBA,SRS, GRI, CRS, IRES, e-pro, ASP, ALHS, SFR, RFC
RE/MAX Premier Group, RE/MAX Hall of Fame, RE/MAX Lifetime Achievement
Over 20 years' experience!
Helping Over 1000 Families Meet Their Real Estate Needs !!!
Direct: 972-365-7888
沒有留言:
張貼留言