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Mortgage Calculator Amortization Versus Rental Payments? What’s The Difference?Mortgage Calculator Amortization vs Rental PaymentsPhoto Courtesy of HYPERLINK "<a href=\"https:/free-photos-vectors/background\">Background photo created by freepik - </a>" FreepikThis is a popular question that a lot of young people ask when they first embark on their life journey. You’ll find many pros and cons for each; buying a house versus renting an apartment. It was also a question I asked myself several times in my housing experience and I still come back to this question today. In this post, I’ll provide you with several points that will give you guidance to determine which is right for you; getting a mortgage calculator amortization or rental payments.Why Should You Get A Mortgage Calculator Amortization And Buy A House?Home AppreciationHouses have appreciated by 4.5% since 1975 and 3% annual increases since 1890 as mentioned in Forbes - B. Conerly. With that said, we had people backward in their home in the short run in a bad market and most build equity over the long term no matter what fluctuation is happening in the housing market. So if you keep the house over a long period, you will gain on average 4.5%. Buying a house is a long-term investment and you will more than likely come out ahead as long as you ignore the short-term drops in the market. Don’t have time to read the full article,get started with a home loan consultation here.Tax-DeductibleAnother advantage of using the mortgage calculator amortization is tax-deductibility during tax time and a lower tax liability each year. Automatic SavingsGet out your mortgage calculator amortization, budget, and calculate this. You’ll need to put 20% down when you first purchase a house unless you qualify for exceptions and zero down options. You’ll need to pay for taxes, maintenance, insurance, and utilities which can be expensive. However, you’ll get this money back and more if you sell over the long haul, giving you a good return on your investment. Paying a fixed mortgage is like a savings account because you’ll get back the 20% down, principal paid into the mortgage plus the appreciation which equals lots of money if you sell, for example, after 10 years or more as long as you break-even or profit. If you keep the house over a fixed 30-year mortgage, for example, you’ll no longer have to pay a mortgage allowing for extra savings or to retire. For more comparisons go to Trulia.You Are In ControlYou control your housing experience and have the freedom to do anything you want with the property unless you have an HOA/POA (Home Owners Association or Property Owners Association). Again, get out your mortgage calculator amortization, and don’t forget about the HOA/POA in your budget. You can do anything your heart desires like paint the walls any color, install a bridge outside, install circular stairs, have a huge RV sitting on your lawn, have 12 kids running around, you’ll be able to keep your pet gorilla and more. If you live in an area with an HOA/POA, make sure you abide by the community rules.Peace and PrivacyYou don’t have to share walls unless you live in a Townhome, Duplex, Condo, or similar type of home. This means lots of peace and privacy with your sanctuary. Your house is one of the few places you can have the good life of quiet serenity and relaxation which you may not get with an apartment or multi-housing community.Don’t have time to read the full article,get started with a home loan consultation here. Long-Term CommitmentOnce you buy a house, it will commit you to the location you choose. Many couples will want to start roots there with a marriage and family. A house purchase is a long-term investment unless you are a very experienced flipper/investor. You don’t want to find yourself in a situation where you need to move a year later because of a work position after purchasing a house. In this case, there is a strong possibility to be upside down in your mortgage payment and unable to recoup your cost when you try to sell that early. It is recommended to stay in your property for at least up to 11 years unless you can break-even or profit earlier which your mortgage calculator amortization should show you. Upgrading to a bigger or different house is an option at that point. Homeowners AssociationIf you have an HOA/POA with your house, excellent amenities are included like walking trails, tennis courts, playgrounds, pools, fitness centers, curb appeal, gardens, fountains, community houses for parties, and more. This will be an extra cost on top of the mortgage. If you don’t have an HOA/POA, you can purchase your own pool, design beautiful landscaping, add flower gardens, shrubbery, tennis courts, and more. Your mortgage calculator amortization along with your budget will show you what you can afford.Photo Courtesy of HYPERLINK "<a href=\"https:/free-photos-vectors/people\">People photo created by yanalya - </a>" FreepikAdditional Points To Consider If Choosing Rental Payments Versus Getting A Mortgage Calculator Amortization? Out-Of-Pocket CostsIf you used your mortgage calculator amortization, you should have a figure for the costs associated with buying a house. Now it’s time for additional comparisons to renting an apartment. When you rent an apartment, the Landlord pays for taxes, insurance, utilities, and maintenance. This makes your out-of-pocket cost cheaper than a home upfront. You don’t have to worry about emergency repairs, like fixing a roof problem or a hole in your bathtub. Also, insurance cost is lower since you only need to insure the contents inside the apartment. The bad side is, there’s no return on your investment in rental payments so you would need to save an additional rent payment monthly and get at least a 4.5% return to keep up with a return on the average house financially. See an accountant or financial consultant for more details. Tax DeductionsRental payments are tax-deductible if you work for yourself, have a business, or some other situation that allows for this. Remember to compare it with the figure you received using your mortgage calculator amortization and budget. Consult with a tax advisor for further information. Down PaymentYou’ll only need to give one month’s rent and a security deposit when you start your rental which is very convenient if you don’t have a lot of money saved. With a mortgage, you need to have a 20% down payment unless you qualify for exceptions or certain loans. When you use your mortgage calculator amortization, you’ll find that you can get this money back after selling, as long as you wait until you can break-even or profit.Don’t have time to read the full article, get started with a home loan consultation here.Rent Increases Rent payments increase over time, and you’ll always have to pay rent into your retirement which will be much higher than a fixed mortgage payment that will not increase. Your mortgage calculator amortization figure compared to rental payments should show you, the earlier you begin a fixed mortgage the lower the cost of the same house compared to buying a house 10 or more years later. You could struggle in your retirement years if you rented as an example, for 30 years, unless you become a Landlord, get promoted, make more money, save well in a retirement plan, and other financial interests allowing the investments to pay for your rent. Also, don’t let it come as a surprise if you inconveniently need to move a few times because of rent spikes. Landlord Is In ControlWith your overall housing experience, you are not in control. The Landlord could sell the property causing you to look for another rental. Also, the Landlord can decide not to rent to you or do an eviction if you don’t get along with each other. Hopefully, you don’t experience this or get caught up in a bad situation with your Landlord. See a Lawyer if you do. Also, the Landlord makes all the rules for you to abide by so you have limitations with changing the home such as painting walls a certain color, installing high-end refrigerators, installing a swing set for your kids or a gazebo outside, installing special windows with plantation shutters, parking a huge RV on your lawn, having a pet dinosaur named Dino in your backyard, babysitting 12 children running around outside and more. Also, you may have limitations on the number of guests you can have at your apartment. Space limitations are also an issue renters may experience. You can get a storage unit if needed when you run out of space with your belongings. You may find this to be costly when reviewing your budget along with your mortgage calculator amortization vs renting figures. Just make sure you talk to your Landlord to get changes to the apartment approved before doing any. Noisy NeighborYou will share common walls and small spaces. This means you will more than likely hear noise from a neighbor above, below you, and on the sides. The noise can also come from several neighbors depending on the apartment design unless you rent a home instead. You will have to go to a secluded island or mountain log cabin for a vacation to get quiet, rest, relaxation, and to experience a small piece of the good life. Homeguides.sfgate can provide additional comparisons. Short-Term FlexibilityYou have more flexibility when renting. If you want to move after a year to another state, it is easy to do as long as you don’t move several months before the end of the leasing agreement. This is great for younger age people who are just starting their life journey and are not ready to settle down yet in a specific location with marriage and family. Also, this is good for families who move a lot to different headquarters and other reasons. Amenities Included In Rental PaymentsWith renting, you also have great amenities for the price if you use your mortgage calculator amortization along with your budget and compared it to an HOA/POA. You get to have pools, playgrounds, fitness centers, walking trails, community rooms to reserve parties, lots of people to befriend, and more without paying extra over the rent payment. View for more details. Photo Courtesy of HYPERLINK "<a href=\"https:/free-photos-vectors/business\">Business photo created by freepik - </a>" FreepikSUMMARYWhen using your mortgage calculator amortization and comparing the figures to rental payments, in addition to your budget, there are many pluses and minuses for each; buying a house or renting an apartment. The answer to this question depends on your current lifestyle and situation. A lot of young people rent when they are just starting on their life journey until they are ready to settle down in one place for a long-term period. When young couples and singles are ready to establish roots, then they purchase a house. Also, a lot invest in real estate mutual funds, stocks, and other diversified investment vehicles.If you found this post helpful, remember to share it with others.Why navigate the challenges of getting a mortgage calculator amortization vs rental payments on your own. We have experienced home loan professionals who helped millions of people successfully determine the right choice for their lifestyle. Many of our customers were able to finance the home of their dreams with our help, no matter if they buy now or over the next few years. It didn’t matter if you had bad or good credit as well. Avoid costly mistakes and contact us today. ................
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