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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.
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
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
After Tax Savings
After Tax Savings
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 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).