SAVE $10,000 BUYING HOMES VS RENTING DUMPS

It is easy to see why buying homes saves money compared to renting. The charts below illustrates  how much it costs to buy a home compared to renting a home. Plus, you can live in home that is not a dump.

Buying Homes Saves Money Photo
Buying Saves Money-Or live in a dump

If your rent is $2, 147.00 per month you are paying $30,730 for housing per year.

If your loan is $2,147.00 per month you are paying $20,801 for housing per year or $10,000 less compared to buying.

There are several reasons to buy a home, and the most important reason is that it is the ONLY way a working person can lower their income taxes.  Loan interest on homes are tax deductible and there is NO tax advantage when you rent.

How much can you deduct off of your income tax will depend on how much your salary is.  The average amount a person pays is around 25% of their salary in federal income taxes, so the more money you make the more you can deduct from you income taxes.

Below are several charted examples of how much you can deduct, but these two statements should make it clear if your tax bracket is at 25%:

 

Charts below show that Buying Homes Saves  Money – If you buy a home you can save up to $10,000 or more per year.

 Interest rates today with 20% down can be under 4%.

INTEREST RATES; 4% WITH A TAX BRACKET OF 25%

Loan Amount Rent or Loan Payment Per Month Cost to Rent First Year Cost To Borrow First Year Rent Verses Loan Savings First Year
$600,000.00 $2,864.50 $40,326.00 $28,422.00 $11,904.00
$500,000.00 $2,387.08 $33,605.00 $23,685.00 $9,920.00
$400,000.00 $1,909.67 $26,884.00 $18,948.00 $7,936.00
$300,000.00 $1,432.25 $20,163.00 $14,211.00 $5,952.00
$200,000.00 $954.83 $13,438.00 $9,478.00 $3,960.00
$100,000.00 $477.42 $6,721.00 $4,737.00 $1,984.00

 

Interest rates today with less than 20% down can be over 4%.

INTEREST RATES; 5% WITH A TAX BRACKET OF 25%

Loan Amount Rent or Loan Payment Per Month Cost to Rent First Year Cost To Borrow First Year Rent Verses Loan Savings First Year
$600,000.00 $3,220.00 $46,101.00 $31,201.00 $14,900.00
$500,000.00 $2,684.00 $38,417.00 $25,994.00 $12,423.00
$400,000.00 $2,147.00 $30,730.00 $20,801.00 $9,929.00
$300,000.00 $1,610.00 $23,051.00 $15,601.00 $7,450.00
$200,000.00 $1,073.00 $15,367.00 $10,401.00 $4,966.00
$100,000.00 $536.83 $7,684.00 $5,200.00 $2,484.00

Keep in mind that you also have to pay 1% of the sales price for property taxes, but the increase in value, (equity) should make up the cost of taxes plus property taxes are also deductible.

Call me at 805-270-5860 and I can send you link to affordable homes you will love.

David Norwood-Central Coast Real Estate David@DNorwood.com

SAVE $10,000 BUYING HOMES VS RENTING DUMPS was last modified: by