home insurance monthly about $50. I have a car loan payment of $350. Would it be better to rent or purchase a home over the next 5 years holding period with a contract rate of 8% and assuming over the next 5 years that the rate will rise 3% annualy including utilities, maintance and taxes to also rise at the same rate. Now If i'm only going to pay interest, i came up with $87,574 this is over a 5 year period at the 8%. How far off am I ?. I for got renting would be about $1400. a month and insurance $25 plus utilities around $220. over 5yrs. to me renting would be far cheaper?
2007-08-16 09:55:51 · 4 answers · asked by nora 4 in Business & Finance ➔ Renting & Real Estate
I'm not sure that I understand everything that you're asking, but you are not factoring in the fact that 1.) the mortgage interest is tax deductible, and 2.) you will own your home, which will increase in value.
If you are not planning to pay anything on your principle and you don't need the tax deduction, then it might make more sense to you to rent.
If I were in your situation, I would purchase a smaller home. You can't be getting a very large apartment for $1,400/month; I would buy a home that's similar in size, which would make owning your home the more sensible solution.
2007-08-16 10:10:44 · answer #1 · answered by Mr. Knowitall 3 · 0⤊ 0⤋
Yes, it would be cheaper, but you don't own anything and have no tax write off.
You are paying someone else's mortgage.
If you can afford to buy, consider it a better choice.
2007-08-16 17:06:37 · answer #2 · answered by ROCKY 2 · 0⤊ 0⤋
If you are getting an interest only loan, you will lose your house in a matter of 5 years because you will owe more than it is worth
2007-08-16 17:26:06 · answer #3 · answered by Pengy 7 · 0⤊ 2⤋
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2007-08-17 09:43:33 · answer #4 · answered by Anonymous · 0⤊ 1⤋