Renting vs.
Buying
Your landlord has probably never
explained just how much your monthly rent is really costing
you? Why should he, you are the key to paying off his
property.
Would you believe that your
monthly rent payment of let's say, $750 per month is actually
costing you $1050 each month? That probably sounds crazy to
you, but let’s look at why this is true.
There are two things that you get
to take advantage of when you own a home:
APPRECIATION - In
most areas, the value of your home will increase each year. Our
area has been experiencing annual appreciation of approximately
4%.
PRINCIPAL REDUCTION
- A portion of the mortgage payment is used to reduce the amount
owed on your home.
An example of a $100,000 home:
| |
Rent |
Own |
|
Monthly Cost |
$750 |
$750 |
|
+Property Taxes |
|
$100 |
|
-Appreciation Benefit* |
$0 |
$335 |
|
-1st Year Principal
Reduction** |
$0 |
$65 |
|
Actual Cost of Living in
Home: |
$750 |
$450 |
*Assuming 4% annual
appreciation value
** Based on a $97,500 loan at 8.5% APR
As you can see, you are LOSING
$300 each month by renting instead of owning this property.
Wouldn't it be better to have
$3,600 ($300 x 12 Months) worth of equity in this home at the
end of the first year instead of absolutely nothing?
We
can help you accomplish home ownership with our
RENT TO OWN programs |
