There are many advantages to buying a home versus renting one. View these advantages in the Buy vs Rent section below.
How much money does it take?
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 Affordability.
Saving with Buying
In many cases, the amount of money a renter spends on rent can be about the same as or more than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners,
the savings can be significant.
Buying versus Renting
The example below shows a cost comparison for a renter and a homeowner over a seven year period.
The renter starts out paying $800 - $1200 per month with annual increases of 5%.
The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000 - $1500.
After 6 years, the renter has usually relocated twice and does not own any property. The rent that was paid belongs to the landlord and cannot be borrowed from.
After 6 years, the homeowner's payment is lower than the renter's monthly payment, equity is built up which can be used for other financial interest, and once the mortgage is paid off, the property is yours.
With the tax savings of homeownership, the homeowner's payment is less than
the rental payment after just 3 years!