Five years have passed and Jamie lee 34, is considering taking the plungenot only is she engaged to be married, but she also deciding on whether to purchase a new home. Jamie Lees cupcake cafe js a success! It has been open for over a year now and has earned itself rave reviews in the local press and from its regular customers who just cannot get enough of her delicious varieties of cupcakes. One such customer who stopped by on a whim in the cafe first week of busines, is Ross. After a whirlwind courtship, Ross, a self employed web designer, proposed and Jamie Lee agreed to be his wife. The bungalow that Jamie Lee has been renting for the first five years is too small for the soon to be newlyweds, so Jamie Lee and Ross have found a brand new three bedroom , 2 1/2 bath home in a quiet neighborhood for $292000.

Their neighborhoods homeowners association dues would be $756.00 a year. After payingva years worth of house payments, their equity will be $3250. Based on Jamie Lee and Ross income, they fall into a 20% tax rate bracket. Use this payment information along with the information below to compare the costs of renting and buying a house.

Saved 008S $450 Rent payment for a house (monthly) Renter's security deposit Renter's Insurance (yearly) $90 104% Savings account interest rate $1,448.08 Mortgage payment National average property tax rate 117% Homeowner's Insurance payment (monthly) $63 Maintenance and repair (%of home value) 1% Interest lost on down payment/closing costs $850 Mortgage Interest paid in first year $12.600 Estimated annual appreciation $2,600 Rental Costs Monthly rent 800.00 Annual rental payments (monthly rent x 12) $ 9.600 00 wwwww Renter's insurance 90.003 S Interest lost on security deposit (deposit x after-tax savings account interest rate) Total annual cost of renting $9,690.00 Buying Costs Annual mortgage payments Property taxes (annual costs) Homeowner's insurance (annual premium) Estimated maintenance and repairs After-tax Interest lost because of down paymenticlosing costs Less: Financial benefits of homeownership Growth in equity Tax savings for mortgage interest (annual mortgage interest x tax rate) Tax savings for property taxes (annual property taxes x tax rate) atimatu n aeescion 1 of 4 Prev Next > re to search