WNING MAKES SENSE
When comparing the cost of owning a home to rentng,
there is more than the difference in house payment against
the rent currently being paid. It very well could be lower
than the rent but when you consider the other benefits,
owning could be much lower than renting.
Each mortgage payment has an amount that is used to pay
down the principal which is building equity for the owner.
Similarly, the home appreciates over time which also
benefits the owner by increasing their equity.
There are additional expenses for owning a home that
renters don’t have like repairs and possibly, a homeowner’s
association. To get a clearer picture, look at the following
example of a $350,000 home with a 10% down payment on
a 6.27%, 30-year mortgage.
The total payment is $2,736 including principal, interest,
property taxes, estimated property tax and mortgage
insurance. However, when you consider the monthly
principal reduction, apprecianon, and maintenance, the net
cost of housing is $1,705. It costs $1,295 more to rent at
$3000 a month than to own. In a year’s time, it would cost
$15,500 more to rent than to own.
With normal amortization and estimated 3% annual
appreciation the $35,000 down payment in this example
turns into $146,000 in equity in seven years. Owning a
home makes sense and can be one of the best investments
a person will ever make.
7 Reasons To Buy Now
1 The house payment with taxes and insurance is probably cheaper than the rent.
2 Rents will continue to rise making the difference even greater in the future.
3 Lock-in the principal & interest payment with a fixed-rate mortgage.
4 30-year mortgage terms are available to most borrowers.
5 The mortgage interest deduction on is intact for taxpayers.
6 The capital gain exclusion for principal residences up to $500,000 remains in place.
7 Prices are continuing to increase due to lower inventories and several years of low
housing starts
