It Still Makes Sense to Buy Vs. Rent

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Information about It Still Makes Sense to Buy Vs. Rent
Business-Finance

Published on November 21, 2008

Author: sherryconnor

Source: authorstream.com

IT STILL MAKES SENSE TO BUY VS. RENT : IT STILL MAKES SENSE TO BUY VS. RENT Essential Information on the Benefits of Homeownership Who’s Renting? : Who’s Renting? Nearly One Third of All Households Rent Baby Boomers' Children – Echo Boomers Individuals Waiting For The Market To Hit The Bottom Opportunity Knocks.. : Opportunity Knocks.. As Jobs Go…So Goes Housing Employment Numbers Have Impact On Housing Market - Monitor The Market at www.bls.gov High Inventory = Opportunity For Buyers Negotiate Purchase Price and Credits Toward Closing Costs Renting Costs a Lot – A Whole Lot! : Renting Costs a Lot – A Whole Lot! Assumptions: $1,500 Monthly Rent Payments Landlord Increases Rent 5% Yearly (some areas as much as 13% currently) Five Year Costs…Nearly $100,000! Costs to Improve…GONE! Overall Costs…Too Painful to Look At Show Your Landlord The Money : Show Your Landlord The Money Assuming a 5% increase per year: Year Monthly Rent Annual Rent 1 $1,500 $18,000 2 $1,575 $18,900 3 $1,654 $19,848 4 $1,737 $20,844 5 $1,824 $21,888 Total $99,480 Average monthly rent over five years $1,658 Getting In Is Easy : Getting In Is Easy Low Down Payment Options Still Available Today FHA Is Back! $300,000 Mortgage – PITI = $2,200+/- After Tax Breaks – Payments Similar to Average Rent over 5-years (Assumes 25% Tax Bracket) Now For The Good Part! : Now For The Good Part! After 5 years: Mortgage Balance Declines to $279,000 Home Value Increases to $383,000 @ 5% Appreciation Net Worth Up $104,000! 3.5% Home Appreciation Still Yields $77,000 Net Worth Your $ Works For You : Your $ Works For You After 5 years: Home appreciation (assuming 5% per year for 5 years): $315,000 $330,750 $347,288 $364,652 $382,885 Appreciation $82,885 Mortgage balance ($279,163) $20,837 Total $103,722 Your Uncle Wants to Help! : Your Uncle Wants to Help! If Cash Is Tight – Uncle Sam Can Help Now Don’t Wait For Refund Bucks: Increase Your Take Home Pay Quit Lending Money to Uncle Sam Interest Free Check Out IRS Calculator (www.irs.gov) to do it right! Tax Advantage : Tax Advantage Assuming a $300,000 loan: P&I $1,798.65 Taxes 312.50 Insurance 100.00 Total $2,211.15 Tax deduction for five years: Interest $87,082 + Taxes $18,750 = $105,832 Using a 25% tax bracket $26,458 Monthly $ 441 Mortgage Payment $2211 – 441 = $1,770 Average Rent (five years) $1,658 Payment difference $ 112 Got Rent? : Got Rent? Your Landlord Loves You If Job Market Is Stable – Don’t Wait Wealth is Created by Home Ownership Buying is a Big Step…But a Step in the Right Direction! Questions? : Questions? Sherry Connor Cell: 704.617.9686 Fax: 866.236.4885 E-Mail: SConnor@ftloan.com Apply online at www.sherryconnor.com

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