Presentation Transcript
IT STILL MAKES SENSE TO BUY VS. RENT :IT STILL MAKES SENSE TO BUY VS. RENT Essential Information on the Benefits of Homeownership
Who’s Renting? :Who’s Renting? Nearly One Third of All Households Rent
Baby Boomers' Children – Echo Boomers
Individuals Waiting For The Market To Hit The Bottom
Opportunity Knocks.. :Opportunity Knocks.. As Jobs Go…So Goes Housing
Employment Numbers Have Impact On Housing Market - Monitor The Market at www.bls.gov
High Inventory = Opportunity For Buyers
Negotiate Purchase Price and Credits Toward Closing Costs
Renting Costs a Lot – A Whole Lot! :Renting Costs a Lot – A Whole Lot! Assumptions:
$1,500 Monthly Rent Payments
Landlord Increases Rent 5% Yearly (some areas as much as 13% currently)
Five Year Costs…Nearly $100,000!
Costs to Improve…GONE!
Overall Costs…Too Painful to Look At
Show Your Landlord The Money :Show Your Landlord The Money Assuming a 5% increase per year:
Year Monthly Rent Annual Rent
1 $1,500 $18,000
2 $1,575 $18,900
3 $1,654 $19,848
4 $1,737 $20,844
5 $1,824 $21,888
Total $99,480
Average monthly rent over five years $1,658
Getting In Is Easy :Getting In Is Easy Low Down Payment Options Still Available Today
FHA Is Back!
$300,000 Mortgage – PITI = $2,200+/-
After Tax Breaks – Payments Similar to Average Rent over 5-years (Assumes 25% Tax Bracket)
Now For The Good Part! :Now For The Good Part! After 5 years:
Mortgage Balance Declines to $279,000
Home Value Increases to $383,000 @ 5% Appreciation
Net Worth Up $104,000!
3.5% Home Appreciation Still Yields $77,000 Net Worth
Your $ Works For You :Your $ Works For You After 5 years:
Home appreciation (assuming 5% per year for 5 years):
$315,000
$330,750
$347,288
$364,652
$382,885
Appreciation $82,885
Mortgage balance ($279,163) $20,837
Total $103,722
Your Uncle Wants to Help! :Your Uncle Wants to Help! If Cash Is Tight – Uncle Sam Can Help Now
Don’t Wait For Refund Bucks: Increase Your Take Home Pay
Quit Lending Money to Uncle Sam Interest Free
Check Out IRS Calculator (www.irs.gov) to do it right!
Tax Advantage :Tax Advantage Assuming a $300,000 loan:
P&I $1,798.65
Taxes 312.50
Insurance 100.00
Total $2,211.15
Tax deduction for five years:
Interest $87,082 + Taxes $18,750 = $105,832
Using a 25% tax bracket $26,458
Monthly $ 441
Mortgage Payment $2211 – 441 = $1,770
Average Rent (five years) $1,658
Payment difference $ 112
Got Rent? :Got Rent? Your Landlord Loves You
If Job Market Is Stable – Don’t Wait
Wealth is Created by Home Ownership
Buying is a Big Step…But a Step in the Right Direction!
Questions? :Questions? Sherry Connor
Cell: 704.617.9686
Fax: 866.236.4885
E-Mail: SConnor@ftloan.com
Apply online at www.sherryconnor.com