Renting and Buying

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Still Renting? It’s Time You Considered Buying a Home

Don't assume your monthly rent is cheaper than a monthly mortgage payment. In fact,
statistics from the National Association of REALTORS® indicates apartment and house rents have increased at a rate of 3% a year in the last 10 years. If your rental house or apartment rents for $1000 per month, it will cost you $1,300 per month in 10 years. The total amount of rent you would pay over that 10-year period would amount to $137,567.00. Here is the real problem; beyond the privilege to live in the rental property, you receive no financial benefit from your rent money in the form of savings or equity!

The Tax Advantages of Owning Your Home

The beauty of home ownership is your ability to realize the immediate tax advantages over
renting a home and those benefits will help you save money! Unlike a monthly rent
payment, a portion of your monthly mortgage payment is returned to you in tax
savings. Take a look at the numbers:

You purchase a $210,000 home

• 10,000 is for a down payment (plus closing cost)
• You take out a loan (mortgage) for the balance ($200,000)
• The mortgage interest rate is fixed at 6.5% for a 30-year period

Your monthly payments (not including maintenance, utilities, insurance, etc.) are:

• Mortgage: $1,264
• Property tax: $230
• Total payment: $1,494

Tax savings per month (assuming a 30% income tax bracket)

• Mortgage interest tax deduction: $322
• Tax deduction for property tax: $68
• Total Monthly Tax Savings: $390
• Total Monthly Cost After Tax Savings $1,104
• Your actual monthly savings is $390.00 by owning your home. The annual savings are much more dramatic.

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