Deciding to Buy

Homeownership is an investment in your future. Homeownership offers immediate benefits and long-term value. It helps build wealth over the long term, strengthens communities, and has been shown to reduce crime, improve education and increase community involvement. Purchasing a home is one of the most important financial decisions you will probably make in your lifetime.

Are you currently renting and debating on taking the plunge into homeownership but aren’t quite sure how this adds up in savings to your bottom line? Take a look at the information below that shows buy your third year of homeownership you are ahead of the game by saving money and continue to save from there forward.

Buy vs. Rent Comparison

The chart to th e right shows a cost comparison for a renter and a homeowner over a seven year period.

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 after 3 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 Source: Ginnie Mae (www.ginniemae.gov)

Other reasons to buy:

Have you outgrown your current home?

Do you need more space for your growing family?

Do you need less space due to a change in family structure or less family members now living at home?

Are you looking for an investment portfolio?

Are you getting married?

Are you expecting more children?

Would you like less yard work?

Would you like more space away from the hustle and bustle?

Would you like to shorten your commute?

Would you rather live in a different area?

Would you like more or less amenities than your current living environment?

Do you have specific needs that have changed (one level, fenced in yard, home office, basement, mother-in-law or teenager suite…)?

There is a lot to consider when purchasing a new home. Having a clear sense of your reasons for buying will help you choose the right property. A Realtor can help buyers stay focused on both the emotional and financial issues that are most important in your current purchasing decision.