Does It Cost More to Buy or Rent

This week’s blog post is about the cost related to value of buying vs. renting a home. I will compare the 2 options with some detail, to demonstrate why choosing to buy is a financially sound decision. In a previous blog, I talked about the advantages of getting pre-approved for mortgage loans. Now I will explore the financial advantages of home ownership.

 You may have wondered about the relative value and expense of both options and asked the question, “Is it better to rent or buy?”; It's very common for someone in the market for a new home to look only at the sale price . For instance, you may be looking in a specific neighborhood for a house, but come to the conclusion that it is out of your price range, based on the asking price. You see the sales price and get intimidated, without stopping to think about what the realized cost will be. By “cost” we typically mean out of pocket expense. For example, a home listing at $400,000 does not mean that is what you will spend on it. With our wide array of loan options, and historically low interest rates available, mortgage payments now are now very comparable to current monthly rents. .

 Owning your own home comes with tax benefits. Homeowners get the benefit of being able to write off the interest on their mortgage payments. In the fist few years of owning your own home this is very helpful, especially when borrowers with fixed-rate mortgages pay a decent amount of interest on their home loans. There is a very good chance that you will get a tax benefit from owning your own home, this should be considered when making the decision to rent or buy.

Rent

$2,000 per month

3 year total - $72,000

Equity - $0

Not Tax Deductible

Rent can increase year over year

Mortgage

Mortgage - $2,500 per month (PITI)

3 year total - $90,000

Equity - $22,006

Mortgage interest and mortgage insurance are tax deductible

Principle and Interest portion of mortgage is fixed and will not increase

This may seem like a time and energy consuming process, but when you compare the pro's to the con's you will likely see that buying is significantly better. It's time to take a leap and start building your equity rather than someone else’s. Contact me to complete the loan process and launchyour future as a home owner.