If you’re a renter, how often have you considered if home ownership may be more cost effective for your budget? Many renters struggle with this dilemma, undecided about which alternative would make better financial sense. Many renters suffer with the inconveniences of renting, yet they’re afraid to pursue the option of home ownership because they believe the misconception buying a home will be more costly than renting. Unfortunately, what reinforces this pessimistic attitude is a bustling real estate market when home prices spiral upward.
Before you give up hope, here are some revealing facts you need to be aware of: After factoring in individual freedom, tax deductions, future rent increases, and the ability to build equity, you’ll be surprised to learn home ownership is actually less expensive in the long term. When you take into consideration the thousands of dollars in potential equity that could be built, you can’t afford to not buy a home.
As a home owner, you can reduce a sizable portion of your taxes by deducting the majority of your mortgage payments from your taxable income. After taking into consideration your particular Federal, state, and local marginal income tax rate (MTR), your home ownership costs can decrease. This could slash your overall home loan costs by 20 to 40%.
For instance, let’s assume your loan payments (including principal, interest, property taxes, and insurance) is $2500. Once you factor in the tax deductions, you could end up only paying around $1900 per month. But of course your final savings will be different contingent on your individual circumstances. The main thing you’ll want to remember is don’t think owning a home is more expensive than renting. It’s best to seek the counsel of an experienced loan agent and accountants to evaluate if owning a home is beneficial to your situation. You may be shocked to learn how affordable buying real estate to be.
As a homeowner, you’ll benefit financially and enjoy the benefits of personal freedom. Gone are the days of living with an overbearing landlord imposing their strict rules on your visitors and pets. If you ask many first time home owners, the sacrifices required to purchase your own home are well worth it. When you evaluate the pros and cons of being a homeowner, don’t forget to consider the additional advantages of personal freedom and stability.
At first glance, the monthly cost of ownership may seem higher than renting. This may be especially true in areas of the country where the cost of real estate is hot. However, it’s important to look at the big picture. The financial benefits of ownership are a long-term process and you can save thousands of dollars over time.
As a home owner, you have the potential to create a large amount of wealth. History has proven that even when the real estate market fluctuates up and down, homeowners outperform renters when it comes to their financial gains.
Are you looking at Santa Ana homes for sale? Check out these Santa Ana Realtors to help you find one!
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