Renting versus Owning with Calulator

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Renting versus Owning with Calculator

There are many advantages to buying a home versus renting one. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.

Buy vs. Rent Comparison
The chart below shows a cost comparison for a renter and a homeowner over a seven year period.

The renter starts out paying $800 per month with annual increases of 5%.
The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000.
After 6 years, the homeowner's payment is lower than the renter's monthly payment.
With the tax savings of home ownership, the homeowner's payment is less than the rental payment after 3 year

Years	Rent Payment	Mortgage Payment	Monthly Difference	After Tax Savings	Yearly Difference	After Tax Savings
1	800	1000	-200	-50	-2400	-600
2	840	1000	-160	-10	-1920	-120
3	882	1000	-118	+32	-1416	+384
4	926	1000	-74	+76	-888	+912
5	972	1000	-28	+122	-336	+1464
6	1021	1000	+21	+171	+252	+2052
7	1072	1000	+72	+222	+864	+2664
8-30			*Savings increase every year*

Your rental company takes part of your rent payment to cover certain housing expenses. When you decide to purchase a home, you accept responsibility for paying for these expenses (listed below). They are additional costs to your monthly mortgage payment and should be included in your budget estimates:

Buying Advantages	Renting Advantages
Tax benefits Property builds equity Sense of community, stability, and security Free to change decor and landscaping Not dependent on landlord for maintenance Privacy Overall improved quality of living	Easier to move Little or no responsibility for maintenance Utilities included (sometimes)
Buying Disadvantages	Renting Disadvantages
Responsible for maintenance Possibility of foreclosure and loss of equity Home Owner Association (HOA) Fee Membership Fee Typical fee for Condo, Townhome, and certain development areas for trash and snow removal and maintenance of common grounds. **It pays for recreational facilities and other services (cable TV). (Common Fee for Condo, and townhome).	No tax benefits No equity is built up No control over rent increases Possibility of eviction Dependent on landlord to maintain property Improvement and design restrictions No privacy **Membership Fee

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.

Your income, savings, and monthly expenses play an important role in determining how large a mortgage you can afford. To figure out the amount you can afford, please click New Purchase.

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MTG Brokers Corp. conducts business as a COMMERCIAL Mortgage Broker throughout the U.S.A.
(All 50 States) including Loan Origination, Processing, and Commercial Financing Consultation

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MTG Brokers Corp. conducts business as a RESIDENTIAL Mortgage Broker in Colorado that can also
originate Residential financing in the following States under the license of an affiliated mortgage contractor:

Alabama, Alaska, Arkansas, Arizona---Pending, California, Colorado, Connecticut, District Of Columbia, Delaware,
Florida, Georgia, Idaho, Illinois---Submitted & Pending, Kansas---Submitted & Pending, Louisiana---Pending, Maine,
Maryland, Massachusetts, Missouri, Michigan *--- 2nd Mortgage Submitted & Pending, Nevada, New Hampshire *,
New Jersey *--- 2nd Mortgage Submitted & Pending, New Mexico, New York, North Carolina, Ohio, Pennsylvania,
Rhode Island--- Submitted & Pending, South Carolina--- Submitted & Pending, Tennessee, Texas, Vermont,
Virginia, Washington--- Submitted & Pending

AL,AK,AR,CA,CO,CT,DE,FL,GA,ID,ME,MD,MA,MO,MI*,NV,NH*,NJ*,NM,NY,NC,OH,PA,TN,TX,VT,VA.

* We Are Not Licensed For Residential 2nd Mortgages