Rent Vs. Buying

			This article has been reprinted from the Ginnie Mae website. There are many advantages to buying a home versus renting one. View these advantages in the Buy vs. Rent Comparison Chart, or view a financial comparison of buying versus renting in the Buy vs. Rent Calculator. Your income, savings, and monthly expenses play an important role in determining how large a mortgage you can afford. To figure out the amount you can afford, please click Affordability.
		Savings: Buying In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant. 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 -118 +32 -1416 +384 4 926 1000 -74 +76 -888 +912 5 972 1000 -28 +122 -336 +1464 6 1021 1000 +21 +171 +252 +2052 7 1072 1000 +72 +222 +864 +2664 8-30 Savings increase every year
		Monthly Expenses: Buying Your rental company takes part of your rent payment to cover certain housing expenses. When you decide to purchase a home, you accept responsibility for paying for these expenses (listed below). They are additional costs to your monthly mortgage payment and should be included in your budget estimates: Property Taxes and Special Assessments Home/Hazard Insurance Utilities Maintenance Home Owner Association (HOA) Fee: Doesn't apply to all purchases. It pays for trash and snow removal and maintenance of common grounds if applicable. Membership Fee: It may pay for recreational facilities and other services (cable TV).