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BUY vs RENT
This is comparison example of home buying vs Renting. The numbers is estimated based on general market comparable in Southern California. We compare it for 10 years period.
This home sold for $350,000. The prices are different in some areas.
And it rents for $2,200 per month. The renting is also different in some areas.

BUYING
RENTING

_ Loan Amount: $350,000
_ Rate: 4% / fixed 30 yrs
_ Mortgage payment: $ 1670/ month
_ Property tax + Insurance: $ 590/ month
_ Tot. Housing Exps: $2,261
_ Principle saving: $ 504/ month
_ Actual housing exps: $1,757/ month
(after principle saving)

Renting: $2,200 / month
Property tax: $0
Insurance: $ 0

Total housing exps: $ $2,200/ month

Principle saving: $0

AFTER 10 YEARS
AFTER 10 YEARS

_ Total principle saving: $ 74,256
_ Appreciation: $87,000 -$350,000
_ Tot. saving: $161,256-$424,256

** The appreciation is based on 25% to 100% for 10 years period. Most real estate double value in very 7-10 years based on the areas.

Principle saving: $0
Appreciation value: $0

** Renting may increase year after year while property values increase. If rent increases by 5% a year; then it will be 50% increase for 10 years.

The comparison shows more advantages for buying than renting. As a home owner, you have advantages for tax purposes, pride of ownership, freedom to decorate your home and make improvement of your choices, etc. You do not have to worry rent increased or to move because the landlord may sell the property.

Advisory: You are secured to buy a home at your financial affordability and make sure you have more income left from your housing expenses. It is better to work out with professionals who help calculate your housing expenses and financial analysis. Make sure to buy a house that you can rent it out as neccessary even it is your primary resident in case you may not be able to make payments; then renting income will cover the morgage payement.

Make sure the renting in the area is more than enough for your housing expenses (mortgage payment, insurance and property tax combined). If you can buy a home in this way, you are secured and no worry about if you may lost your job or unable to pay for the mortgage payment because you can rent it out so you can get the renting income more than enough to pay for mortgage payment as long as you can rent it out. Then, this property is your investment.

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