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When we ask people why they rent an apartment, condominium or a home, in 9 out of 10 instances people say that it is cheaper than homeownership. Well, we would like to disprove that myth once and for all.
The fact is, when people tell us that they cannot afford to purchase the home of their dreams, we tell them that, "You cannot afford NOT to buy here are important reasons why!"
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You Do Not Need 10%-20% or More For A Down Payment and Closing Costs To Purchase A Home.
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With good credit and a stable work history you can obtain 100% financing for a home. Which means you don't have to come up with a down-payment! Some programs will allow you to finance up to a 107% of the homes purchase price. That means your new $300,000 home could cost you as little as $3,000 total, out of pocket expense. (1% of the purchase price of the home - which is earnest money).
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Even if you have bad credit or bankruptcy you can still get financing for a home. I have had clients with credit scores as low as 500 that was able to purchased a home, so don't think you can't because of your credit!
Did you ever think that a $225,000 dollar home could cost you about the same as your two bedroom apartment? IT CAN!
This scenario is based on buying a home priced at $225,000 with 0% down and rolling in your closing cost of $6,750 (closing cost is estimated and will vary). Loan amount $225,000 + $6,750 = $231,750
Take a look at the Rent vs. Buy Chart Listed Below. When you look at the bottom line, you too will clearly understand why homeownership is actually far less expensive than renting and don't forget interest deductions allowed by the IRS. That alone will save you $$$$
| Inputs |
| Cost of Home: |
$225,000 |
| Closing Cost (Estimated at 3%) rolling cost into loan |
$6,750 |
| Down Payment: |
$0.00 |
| Loan Amount: |
$231,750.00 |
| Annual Insurance (Estimated): |
$1,200.00 |
| Annual Tax ( Estimated at 2.3% - with homestead): |
$5,100.00 |
| Year: |
30 |
| Interest Rate: |
5.5% |
| Results - Monthly Payment |
| Loan Amount: |
$231,750.00 |
| Principal & Interest: |
$1,315.85 |
| Homeowners Insurance (Estimated): |
$100.00 |
| Property Taxes (Estimated at 2.3% - Cost of Home): |
$425.00 |
| Total PITI Payment: |
$1,840.85 |
| Condo Fees: |
$0.00 |
| Monthly Loan Insurance: |
$0.00 |
| Total Monthly Payment: |
$1,840.85 |
| Results - Rent vs. Buy |
| Monthly Rent: |
$1,400.00 |
| Annual Rental Increases: |
2.5% |
| Monthly Renter Insurance: |
$30.00 |
| Savings or Investment Rate: |
5% |
| No of Years you plan on keeping the home: |
5 |
| Yearly Appreciation on the Home: |
4.5% |
| Annual Home Maintenance: |
0.8% |
| Total Investment Return: |
$0.00 |
| Net Appreciation: |
$95,412.61 |
| Total Savings: |
$65,797.87 |
An initial monthly rental payment of $1,400.00. We assume that your rent will increase by 2.5% per year.
You are considering buying a home valued at $231,750.00, with a down payment of 0% . Your monthly mortgage payment of $1,315.85 includes both principal and interest and is based upon a loan amount at an interest rate of 5.5%.
Summary:
By buying your home versus renting you will have saved $65,797.87over the next 5 years.
(Net Appreciation - Total Investment Return + Total Rental Payment - Total Mortgage Payment)
Give it a try yourself
use the calculator to enter your own input
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| Breakdown of this Analysis: |
| Total Rental Payment: |
$90,106.32 |
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Total Mortgage Payment: |
$119,721.06 |
| Down Payment: |
$0.00 |
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Home Value: |
$288,802.66 |
| Interest Earned: |
$0.00 |
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Remaining Loan Balance: |
$193,390.05 |
| Total Investment Return: |
$0.00 |
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Net Appreciation: |
$95,412.61 | |
*NOTE: Please utilize this comparison as a guide only. Each homeowner experience will vary. Fluctuation may occur on the aforementioned comparison numbers based on a number of factors including, but not limited to purchase price, loan rate, term lengths, closing costs, actual income generation, alternative investment returns, realized home value appreciation, supply/demand of property, lease/rental amount of current residence. Federal/State Income Taxes, etc...
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A Jump start toYour credit solution
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My FREE Credit Repair - Bad Credit &
Excessive Debt Elimination Solved!
Credit repair, debt elimination, all without
bankruptcy, no need for an attorney.
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With 1-click-n-print feature, any letter can be instantly edited and printed, and therefore made ready to be sent to the 3 largest credit reporting agencies; otherwise known as credit bureaus. These letters are designed to help you resolve bad credit by eliminating it from further appearing in your credit report(s), as well as to eliminate excessive debt WITHOUT the application of bankruptcy; all of which can be done free by the consumer directly, and without the need of any professional(s)
You can repeat this process an unlimited number of times until you have completely restored your credit to an excellent rating, and a credit score above 750.
My FREE Credit Repair in highlights:
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What benefits does it bring?
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