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What explains why people with higher incomes favor buying a home over renting?
Buying is an investment, but it's also more expensive.
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Renting vs. Buying . Is renting cheaper? No. Given the same house it will almost always be cheaper to own than to rent. Here is why: Somebody owns that house. And there is …probably a mortgage on it. Let's say the mortgage payment is $500. If I owned it and rented it to you I would not charge your $500. I would charge you $650 or $700 because I would own it to make a profit. Not to mention the fact that a home owner is always getting equity while a renter is not. On the flipside as a renter you do not have to worry about repair, taxes, insurance, etc. . Don't forget the tax advantages to owning the home! Depending upon where you live, there may be programs to encourage home ownership or to assist low-income and first-time buyers. In our town we have an infomercial on TV every Wednesday night in which two realtors review "available properties for no money down and monthly payments less than you'd pay for rent!" I recommend a book called "Live Debt Free," about buying a small property when you're young, making double payments so you own it outright in 15 years, then selling it for an appreciated amount which you use as a down payment to buy the home of your dreams in your middle age. That comparatively large down payment means you'll have lower monthly payments, which might mean one spouse can stay home with the kids or more income would be available for travel or high living. It's the kind of book you have to give as a graduation present, 'cause by the time you're my age it's too late! . Keep in mind that there are one-time costs associated with the purchase of a house, like closing costs and realtor fees. If you only plan to live in a place for a year or two, this averages out to a lot of money per month, and usually makes it cheaper to rent. . Use the Ginniemae.gov calculator to compare the advantages and considerations of owning vs. renting a home. I think this partially answers the question. The assumed rate of appreciation does change the return and decision process. If, for example, the real estate market is running at a 2 to 3% decline each year...renting makes sense. If you had appreciation...of 3%..then yes, it would usually make sense to buy. Interest rate, condition of the home you want to buy, your plans and time frame all make a difference. For instance...what if you only wanted to live in a home for 2 years? Closing costs to purchase and then later sell make the decision to rent more realistic. : Renting home is better in some cases.. If your rent is very low. If you plan to moving in a few years or months. I personally prefer to rent an apartment. I have been renting a 2 bedroom for $800 a month while continuing my real estate enterprise so far for the past 4 years -- any defects are paid for and fixed by the propery owner and I can continue my enterprise and not keep any properties under my wings for extended periods of time this enables me to be able to leave the country for travel fun without worrying too much about vandals, home insurance, property taxes, repairs, etc... as I build my fortune for the next 15 years at which time I will then use some of the savings to begin winging some of the properties for my own personal retirement portfolio-- in the meantime... the IRA account looks wonderful. I urge anyone to teach their 20 year old son or daughter how to do foreclosures the same way I do them and to save what they can and prepare themselves for an early retirement by age 40 Renting a home will give you more chance to save it is best to rent if you still don't have budget to buy your dream house. If you know how to handle properly your money surely that you can save a lot from your money while you are renting.
Answer It is better to rent a home because you might not like it after a while and you might want to move out.
Home interest increases your deductions The interest you pay when you buy home is an itemized deduction on your tax return. As long as the interest and your other itemi…zed deductions exceed the standard deduction, they reduce your taxable income, so you pay less income tax. Also The property taxes you pay are also generally deductible. The gain on the increases in value (ignoring some million $ exceptions) gets virtual tax free treatment on sale. As noted above: The interest expense, which is actually not on the home but on the mortgage that is secured by the primary home, is deductible. (Of course, there is a true expense to that also). Frequently, having made the threshold for itemizing deductions, (by incurring the interest), allows someone to start itemizing and deducting other items they wouldn't have been able to before. On the other hand, the standard deduction was a "give me" in determining taxable income, and your only going to benefit by the amount above it that you can itemize.
While income is an important factor in the purchase of a new home, it is not the only criterion. However, generally, lenders will not loan money on a home where the paymen…t exceeds 28 percent of a monthly income.
Can I being 63 and on section 8 rent a home?
That question can not be answered without the overall expenses being outlined. When true debt-to-income ratios are calculated, they include all debt known to the lender …from credit cards, auto loans, home insurance, home taxes...etc.
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The answer would be yes, depending. A good rule of thumb is to calculate 43% of your gross income. Then, subtract your monthly payments (credit cards, installment loans and su…ch). You'll be left with a figure that should be close to you eligible amount for a total monthly mortgage payment (principal, interest, taxes and insurance). It would be wise to ensure that even if my calculation allows this total monthly payment to be over 31% of your gross income, that you try not to take a mortgage payment over that amount. Many do, but it stretches them financially.
Germans rent and buy homes, just like most other places in the world. Usually people with lower incomes will rent a place, where people with solid careers own their own houses… or units.
When you rent a home you pay repeditivly for a long time instead of buying which is paying for the whole house and only having to pay bills later.
Advantages of renting a home: - Possible free utilities - Possible free water and electricity - Cheaper then buying a house Disadvantages of renting a home: - Possible unneed…ed costs and maintence, - Damaged house - Bills that should not be paid when owning a home. Advantages of buying a home: - Your own space to relax - Supporting a family - Having a secure base to call home Disadvantages of buying a home: - Depending on how much money you have, you can rack anything from $10k to $400k dollars in debt - Costs of maintenance of a house - Bills and Repairs - Self-maintenance - Cleaning your house Anyway you look at it, renting a home or buying a home has it's pro's and con's The best way to determine which is better is to do your reasearch, go with trusted landowners if you are renting, buy a home within your own financial limitations. Kind Regards, Anonymous Caretaker
Because when you rent you are like burning money you have no equity so when you buy you can up the value of the house therefore making money and also you don't have the burden… of rent and the annoyance of landlords controlling you!
It depends on your recurring monthly debt (minimum monthly payments). This number divided by your gross monthly income give you your debt-to-income ratio. This ratio can be no… higher that 57 (but in most instances 45) with the proposed new mortgage payment in order to qualify.
Which of the following best explains why people with higher incomes favor buying a home over rentingAsk us anything?
Buying is an investment but its also more expensive