Statistics from NAR show that rental houses and apartments increase rents 3% per year. If your rent payment is $1,000 a month, it will cost you $1,300 per month in 10 years. The total amount of rent you would pay over 10-year period would amount to $137,567. And, you had NO tax advantage. There is even a $7,500 tax credit for first time buyers or anyone who hasn’t owned a home in the past 3 years. Wouldn’t it be great to receive a check from Uncle Sam of $7,500?
Let’s say instead of renting you buy a $200,000 home now:
You purchase a $200,000 home
Fixed rate mortgage of 6.5% for 30 year period
Mortgage: $1,264
Property Tax and Insurance: $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: $309
Total Monthly Cost of your $200,000 homes after tax savings $1,104.
With every monthly payment you are paying off your home, instead of someone else’s.
RATES ARE AT 5.57% WHICH MEANS YOU CAN EFFECTIVELY SAVE 10% ON THE SAME HOUSE AS DESCRIBED ABOVE.
This is exciting times for first time home buyers. Give me a call so I can answer your questions and help you start living the American Dream of Home Ownership.
Have a great week-
Linda