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Proudly Serving The Antelope, Santa Clarita, and San Fernando
Valleys.
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Renting
vs. Buying
When we
ask people why they rent an apartment, condominium or a home, in 9 out
of 10 instances people say that it is cheaper than homeownership.
Well, we would like to disprove that myth once and for all.
The fact is, when
people tell us that they cannot afford to purchase the home of their
dreams, we tell them that, "You cannot afford NOT to buy
and here are two important reasons why!"
You Do NOT Need
10%-20% or More For A Down Payment and Closing Costs To Purchase A
Home.
With good credit and a stable work history you can obtain 100%
financing for a home. Some programs will allow you to finance up
to a 103% of the homes purchase price. That means your new $400,000 home could cost you as little as
$500 total, out of pocket
expense.
Did you
ever think that a $225,000 dollar home could cost you about the same
as your two bedroom apartment? IT CAN!
Take a look at the Rent vs. Buy Chart Listed Below. This
scenario takes into account such factors as home appreciation, tax
deductions for home ownership and interest deductions allowed by the
IRS. When you look at the bottom line, you too will clearly
understand why homeownership is actually far less expensive than
renting.
If you would like more
information on the $500 Total Move in Cost loan, click
here for the
details.
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Rent
vs. Buy Comparison
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Conditions
and Assumptions
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Rent vs.
Buy Data
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Target Home
Information
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Rental Costs
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| Purchase
Price |
$225,000 |
Current Rental Payment |
$950.00 |
| Down
Payment Amount |
$6,750 |
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| Estimated
Closing Costs (%) |
4% |
Effective Net Rent |
$950.00 |
| Estimated
Closing Costs ($) |
$9,000 |
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| Loan
Amount |
$218,250 |
Buying Costs
(Home)
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| Interest
Rate |
7.25% |
Estimated Monthly Home Costs |
$1833.11 |
| Term of
Loan in Years |
30 |
Deduct Monthly Interest
Amount |
$500.91 |
| Property
Tax Rate (%) |
1.25% |
Deduct Monthly Tax Deduction |
$91.41 |
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Deduct Mthly Home
Appreciation |
$562.50 |
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Homeowners
Monthly Cost
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Monthly Home Cost (Effective) |
$678.29 |
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| Principal
& Interest |
$1,488.85 |
Monthly Amt Saved By Buying |
$271.71 |
| Monthly
HOA Dues |
$0.00 |
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| Monthly
Property Taxes |
$234.38 |
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| Monthly
Mortgage Insurance |
$60.00 |
Totals For
Entire Comparison Period
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| Monthly
Fire Insurance |
$49.88 |
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| Total
Monthly Home Cost |
$1,833.11 |
Total Rent Paid Over Period |
$56,999.70 |
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Total Home Costs Over Period |
$40,697.47 |
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Estimated Gain
Analysis
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Total Amount Saved By
Buying |
$16,302.23 |
| Estimated
Years In Home |
5 |
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| Estimated
Annual Appreciation % |
3 |
Total Principal &
Interest-Period |
$89,330.98 |
| Tax (%)
Federal and State |
39.0% |
Total Interest Paid Over
Period |
$77,062.67 |
| Alt. Rate
Of Return (%) |
5.40% |
Total Principal Paid Over
Period |
$12,268.32 |
| Alternative
Investment |
$7,000 |
Loan Balance, End Of Period |
$205,981.68 |
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*NOTE: Please utilize this comparison as a guide only.
Each homeowner experience will vary. Fluctuation may occur on
the aforementioned comparison numbers based on a number of factors
including, but not limited to purchase price, loan rate, term lengths,
closing costs, actual income generation, alternative investment
returns, realized home value appreciation, supply/demand of property,
lease/rental amount of current residence. Federal/State Income Taxes,
etc... |
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The
Most Effective Way For You To Buy Your New Home At The Lowest Possible
Price!
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