Friday, February 1, 2013

What's it Going to Take?

thumbsupdown.jpgHow much evidence is needed to make a decision to get out of the rent race and become a homeowner? Compare your rent with a mortgage payment on a similar size property. If you want a larger home than your current one, use the rent that property would require instead of what you're currently paying. If it's considerably cheaper, you may not need any further encouragement. By the time you consider the principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you're paying. The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation. The equity is part of your net worth and an investment in your family's future. The income tax savings can be an additional financial consideration if the combined interest and property taxes exceed the allowable standard deduction. Trends are showing that both tenants and homeowners are staying in their homes longer. It's been said that whether you rent or own, you're paying for the home. Do you really want to buy the home for your landlord? Check out your numbers on a Rent vs. Own.

1 comment:

  1. Hi Charles,
    you are in a tough market. I had a house in Virginia. It was on the south side of the James River in Bon air. Houses on the north side were much smaller with less yard and privacy. My home was listed for $478,000. Three and a 1/2 baths, eat in kitchen, dining room for 8. Two fire places, 5 large bedrooms = 3500 sq ft. I had to sell it for less than those across the river.
    Anyway, location.
    I'm in Massachusetts now. Bought a smaller home and have the same mortgage payments. Some times I feel as if I want to be a renter due to the cost of keeping a house and the time involved.
    Your post discusses the offset cost when considering a mortgage and the cost of rent. But, what about maintenance? My new home was built in the late 70's.