Your Landlord has probably never explained just how much your monthly rent is really costing you? Why should he - you are the key to paying off his property.
Would you believe that a monthly rent payment of $1300 per month on a beautiful, but not extravagant, $200,000 house would actually cost you about $1925 each month because of equity you could be earning if you owned the house? That might sound crazy to you, but let's illustrate this fact.
There are two things that you don't get to take advantage of when renting:
APPRECIATION - In most areas, the value of your home will increase each year.
PRINCIPAL REDUCTION - A portion of the mortgage payment is used to reduce the amount owed on your home.
An example of a $200,000 home with a 10% down payment.
| RENT | OWN | |
| Monthly Rent or Mortgage Loan Payment | $1300 | $1320 |
| 1st Year Loan Principal Reduction (average per month)* | $0 | $125 |
| Appreciation Benefit (average per month)** | $0 | $500 |
| Actual Monthly Cost of Living in Home | $1300 | $695 |
*Based on a $180,000 loan at 8.0% APR
**Calculated with a modest 3% annual appreciation value
As you can see, you are LOSING about $625 in wealth accumulation each month by renting instead of owning this property. Wouldn't it be better to have $7,500 worth of equity in this home at the end of the first year instead of absolutely nothing? We can help you accomplish home ownership through our home buying programs.