Use this rent versus own calculator to help you decide if buying a home is the right decision to make at this point in your life. This decision depends on many factors such as how much the home costs, how much you are paying in rent, and how much you will have to pay annually to keep your home and maintain it.
Whether you are renting or buying, there are different costs that you must factor into your decision. Some are monthly, some annual, and others variable. These are actual cost outlays on your part and you must calculate expected increases, inflation, investment returns, and other such things.
As I mentioned, in my situation the monthly payments would be about the same. So the cost differences I am looking at are the one-time payments and perpetual payments involved with owning.
Your decision to rent or buy could carry different tax implications. This is based on the United States tax code.
The US Government likes to use tax incentives to motivate people to do things they deem worthy. In this case, their is an obvious preference for people who own. The calculators account for the mortgage interest that you are able to write-off at the marginal tax rate you input. They usually assume that you will meet the requirements to avoid paying capital gains tax on your house.
This is one of the biggest opportunity costs that gets examined in rent vs buy calculators. The decision to rent or buy has more to do with the investment factors than the actual payment amounts.
Rent goes up as time goes on, but your mortgage payment is constant. If you are staying in a geographic area for a period of time, a rent vs buy calculator may lean towards buying. If you are renting, you need to be more vigilant about investing the money to ensure that you aren’t leaving too large of an opportunity cost on the table.
If you would like to see if you qualify to purchase a home call Billi West with Network Funding TODAY @ 904.449.9460.
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