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JBS

Giving you more house than you thought you could afford

How Does Buying = Saving Money versus Renting???

When you rent a home you are paying every month for something that you will never own and will not get any tax benefits from.

Interest Rates are currently near an all time low. They are about 5%.

So let's say that you are currently renting at $850.00 a month. That is $10,200.00 per year that you are spending on housing. 

 If you have a mortgage for $108,000.00 your payment is about $650.00 a month. 

Just by having a mortgage you are saving $200.00 a month!!!!!

The government lets you write off any interest that you pay on your house. So for the 1st several years - Most of your payment is actually just paying interest. The 1st year - you will pay about $5,600.00 in interest. If you itemize your deductions on your tax return you will be writing off that money and not paying taxes on it. Therefore, if you are in a 25% tax bracket you will save $1,400.00 in taxes that you do not have to pay.

So in summary.

Your payment is about $200.00 a month cheaper or $2,400.00 a year.

The government is going to let you not pay $1,400.00 a year in taxes.

So all in all you are saving $3,800.00 a year in real money!!!

If you subtract the tax savings of $1,400.00 from your mortgage. It makes your yearly mortgage payment to be $6,400.00. 

 ($650.00 a month x 12 months = $7800.00)

($7,800.00 - $1,400.00tax savings= $6,400.00 a year

$6,400.00 a year divided by 12 months = $533.33/month