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Buying a Home v.s. Renting
a Home
When you rent a house, the only real
advantages you have are that you are generally
free of most maintenance responsibilities,
and that you are also free to change houses
whenever you want (depending on the terms of
your rental agreement). The problem
with this is, that you are spending nearly
as much on rent as you would on repaying a
loan, and at the end of any given time frame,
you have nothing to show for it.
| MONTHLY
RENT |
AFTER
10 YEARS |
AFTER
20 YEARS |
|
| $500 |
$77,641 |
$205,517 |
| $800 |
$124,226 |
$328,827 |
| $1,000 |
$155,282 |
$411,034 |
| $1,500 |
$232,923 |
$616,551 |
| $2,000 |
$310,565 |
$822,067 |
| $2,500 |
$388,206 |
$1,027,584 |
When you buy a house,
every payment you make contributes toward your
own asset ("equity" in your house). Assuming
you make all the mortgage payments, you will
own the house. The money you would have paid
in rent and become “dead” money,
has been used to build an asset which can usually
be expected to become worth much more as time
goes on.
By renting, you lose the ability to build
equity, take advantage of tax benefits
and protect yourself against rent increases.
Also, you may not be free to decorate without
permission and are literally at the mercy
of the landlord for your housing.
Owning
a home has many benefits. When you make
a payment, you are building equity- and that
is an investment. Owning a home also qualifies
you for tax breaks which can help in financing
the upkeep in maintaining your home. |
|
| MONTHLY
PURCHASE PAYMENT AMOUNT BY INTEREST RATE |
| LOAN |
5.0% |
5.5% |
6.0$ |
6.5% |
7.0% |
7.5% |
8.0% |
8.5% |
9.0% |
|
| $80,000 |
$429 |
$454 |
$480 |
$506 |
$532 |
$559 |
$587 |
$615 |
$644 |
| $100,000 |
$537 |
$568 |
$600 |
$632 |
$665 |
$699 |
$734 |
$769 |
$805 |
| $120,000 |
$644 |
$681 |
$719 |
$758 |
$798 |
$839 |
$881 |
$923 |
$966 |
| $140,000 |
$752 |
$795 |
$839 |
$885 |
$931 |
$979 |
$1,027 |
$1,076 |
$1,126 |
| $160,000 |
$859 |
$908 |
$959 |
$1,011 |
$1,064 |
$1,119 |
$1,174 |
$1,230 |
$1,287 |
| $180,000 |
$966 |
$1,022 |
$1,079 |
$1,138 |
$1,198 |
$1,259 |
$1,321 |
$1,384 |
$1,448 |
| $200,000 |
$1,074 |
$1,136 |
$1,199 |
$1,264 |
$1,331 |
$1,398 |
$1,468 |
$1,538 |
$1,609 |
| $220,000 |
$1,181 |
$1,249 |
$1,319 |
$1,391 |
$1,464 |
$1,538 |
$1,614 |
$1,692 |
$1,770 |
| $240,000 |
$1,288 |
$1,363 |
$1,439 |
$1,517 |
$1,597 |
$1,678 |
$1,761 |
$1,845 |
$1,931 |
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The Accredited Buyer Representative (ABR) designation is the benchmark
of excellence in buyer representation. This coveted designation
is awarded by the Real Estate BUYER'S AGENT Council (REBAC),
an affiliate of the National Association of REALTORS, to real
estate practitioners who meet the specified educational and
practical experience criteria. |
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