Buying or Renting

When you’re thinking about buying your first home, it’s essential for you to be
confident in your decision to buy instead of rent. However, you may not know about
the many great reasons to buy a home! Here are just a few of them:

Smart investment
When you invest in a home, it offers the possibility for appreciation in value. The
equity becomes yours when you’re still paying off your mortgage. You even get to
live in it while your investment matures.

Tax advantages
Since both mortgage interest and property taxes are tax deductible,
homeownership can save you significant amounts of money every year.

Planned housing costs
You decide how much you spend on your home, including repairs and
improvements. Unlike renters, homeowners with a fixed-rate loan can lock in their
monthly housing costs.

Improvements to your taste
You can choose which improvements to make your own property, such as a deck,
kitchen remodel, or new paint, instead of needing permission from your landlord.

Rent Multiplier

Not only does owning a home give you a haven for yourself and your family, it also
makes great financial sense because of the tax benefits — which you can’t take
advantage of when paying rent.

The following calculation assumes a 28 percent income tax bracket. If your
bracket is higher, your savings will be, too. Based on your current rent, use this
calculation to figure out how much mortgage you can afford.


Multiplier: x 1.32

Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment — including taxes
and insurance — that is approximately one-third larger than your current rent
payment and end up with the same amount of income.

For more help, contact one of our
preferred lenders

Reprinted from REALTOR® magazine with permission of the NATIONAL ASSOCIATION OF REALTORS®.
Copyright 2008. All rights reserved.