Is it financially better to buy a home or to rent? The answer to this question depends upon how much the home costs, how much you are paying for rent, and how much you will have to pay each year in order to maintain your home.
If you were to pay $800.00 per month, for example, and the average rental payment increase was four percent, you would pay $51,996.70 towards rent in a five-year period. If you purchased a home and borrowed $250,000.00 with a five percent interest rate and you paid $900.00 every year toward its maintenance, you would pay $84,553.60 towards mortgage payments in a five-year period.
When you consider your tax benefits and the appreciation of your home, you may find you will actually SAVE money by purchasing a home. If your home shows an annual appreciation of five percent and your selling cost is seven percent, your house appreciation value will be $382,884.47. As a result, your total home purchase benefit will amount to $94,121.38.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it’s applicability to your financial situation. Please consult your own financial advisor.