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Buy or Rent?

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One of the most important, and expensive decisions you’ll make in your life is buying a home.

Why would you buy a home in Indianapolis? After all, apartment or rental living has its benefits. No maintenance worries, few insurance concerns along with the ability to pick up and move with little hassle. But maybe the time has come and you realize that buying a home will improve your financial stability.

Sure, renting has its benefits

  • Small to no upfront investment
  • No property maintenance
  • Fixed costs

 However, over the long term, the advantages for buying far outweigh the disadvantages.

  • Taxes
  • Credit history
  • Equity growth

Let’s take a look at the tax advantages:

Federal Income Tax savings is one of the greatest measurable benefits of homeownership. 

          $100,000 The purchase price of a home
          - $ 5,000 A 5% down payment
          $ 95,000 Mortgage loan amount

The approximate monthly house payment would be:

          $     697 Principal and interest at 8% for 30 years
          + $ 100 Approximate monthly property taxes
          + $   30 Approximate monthly homeowners insurance
             $ 827 Total house payment

Federal Income Tax savings result from these two items:

          $    7,600 Interest paid on your mortgage loan
          + $ 1,200 Property taxes paid on your home
          $    8,800 Total annual tax deduction!

How much savings is that in real DOLLARS?

A homeowner (married filing jointly) with taxable income over $45,200 would be in the 27.5% tax bracket (3) (the second lowest bracket) and would save $2,420.00 per year or $202.00 per month!

What about the advantages to your credit rating?

Owning a home is the most prudent investment you can make. Which might explain why the mortgage companies take so much effort when reviewing your loan application! But once you’ve purchased and make your payments on time, you’ll receive long-term benefits as you prove your credit-worthiness.

And about that equity growth. This is the easiest to explain.

Home values are one of the very few investments you can make that have shown consistent, long-term growth. Even conservative analysts suggest that a 5% annual increase in value can be expected with home ownership. And you get to live in your investment, to boot!

Plus, Indianapolis homeowners have found that the local market is less subject to the highs and lows of real estate booms. This makes your investment in Indianapolis real estate a much more stable investment.

So – you’ve decided that it’s time to buy a home. Now … start saving. The larger your down payment, the better terms you’ll receive on your mortgage. Save by setting aside at least 10 percent of your income for a down payment.

Finally, don’t make purchasing a home a last-minute decision. Plan ahead and it will pay off nicely for you in the future.

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