What are the advantages of owning your home? When you own your home you can:
- Build equity — your wealth will increase as you gain more home equity. If your home “appreciates” (increases in value over time) equity builds even faster. Building equity allows people to plan for their future. This could be retirement, college fund or other goals.
- Tax advantages — mortgage interest is most often tax deductible. You should contact a tax consultant for your situation.
- Stabilize your payments – monthly home mortgage payments are relatively stable if your loan has a fixed interest rate. Payments can vary with fluctuations in property taxes and insurance premiums.
- Pride of ownership — It’s your home – you can decorate, add on, make changes and your family has a permanent home to live and grow in.
- Pride of community — homeowners often are more involved in the well-being of their communities; many homeowners work together for better schools and less crime.
Buy vs. Rent Comparison
- The chart below 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 | -$160 | +$32 | -$1416 | +$384 |
| 4 | $926 | $1000 | -$74 | +$76 | -$888 | +$912 |
| 5 | $972 | $1000 | -$74 | +$76 | -$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 Website http://www.ginniemae.gov/rent_vs_buy/Rent_vs_buy.asp?subTitle=YPTH
For more information and to see how easy it can be to own your own home, contact the Pyramis sales team. We can be reached via phone at (210) 593-9810 or by filling out our quick contact form here.