Why are you renting?
There are many different answers to this questions, but if your answers are:
- "I've never thought of that,"
- "I don't think I can afford it," or
-"I don't have the down payment"
Start thinking about it and check out what you can do!
Below is a great table from the Ginnie Mae government website that shows the difference between Buying vs Renting
- 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 homeownership, the homeowner's payment is less than the rental payment after3 years
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
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Now you've seen this table, and you may be saying "But I don't have the downpayment." If that's your concern, you'll be happy to know that with 3.5% down your good to go!
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