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Should You Rent or Buy?

Should you rent or should you buy your home? It takes more than looking at your mortgage payment to answer this question. This calculator helps you weed through the fees, taxes, and monthly payments to help you make a good financial decision. Click the "View Report" button for a detailed look at the results.

Definitions

Price of home

Purchase price of the home you wish to buy.

Cash on hand

Cash you have for the down payment and closing costs.

Interest rate

The current interest rate you can receive on your mortgage.

Term in years

The number of years over which you will repay this loan.

Property tax rate

Your property tax rate. 1% for a $100,000 home equals $1,000 per year in property taxes.

Home insurance rate

Your homeowner's insurance rate. 0.5% for a $100,000 home equals $500 per year for homeowner's insurance.

Loan origination rate

The percentage the lending institution charges for its origination fee. 1% for a $100,000 home equals $1,000.

Points paid

The total number of points paid to reduce the interest rate of your mortgage. Each point costs 1% of your mortgage balance.

Other closing costs

Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees paid.

Total closing costs

Total upfront costs to close your loan. This is the sum of the loan origination fee, amount paid for points and other closing costs.

Total for down payment

Total funds remaining for down payment.

Mortgage amount

Total amount of loan.

Investment return

The rate of return you could receive if you invested your closing costs and down payment instead of purchasing a home.

The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2003, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.7% per year. During this period, the highest 12-month return was 64%, and the lowest was -39%. Savings accounts at a bank pay as little as 1% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.

Monthly rent payment

Amount you currently pay for rent per month.

Income tax rate

Your current marginal income tax rate.

Expected inflation rate

Inflation rate used to adjust amounts subject to annual increases. These amounts include rent, insurance and tax payments.

Home appreciates at

Annual appreciation you expect in the home you are purchasing.

Future sales commission

The percent of your home's selling price you expect to pay to a broker or real estate agent when you sell your home.

House payment

Total of principal, interest, taxes and insurance (PITI) paid per month for your home. Insurance includes Principal Mortgage Insurance (PMI) and homeowner's insurance.

Principal payment

Total of principal paid per month on your mortgage.

Tax savings

The value of the tax deduction you receive on your mortgage's interest and home's property taxes. For example, if you have $900 in interest and $100 property taxes per month, the value of the tax deduction would be $280. (At a tax rate of 28%).

Net house payment

Your house payment minus the value of the tax deduction and principal payment.

Net home price

Net selling price of your home after subtracting any sales commissions.

Monthly PI

Monthly principal and interest payment.

Monthly PMI

Monthly cost of Private Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year.

The mortgage calculators are provided by KJE Computer Solutions, LLC and made available to NUMBER1EXPERT as self-help tools for your independent use and are not intended to provide investment advice. We can't guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

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Buyers Remorse >Patience is Required Sellers often have to deal with a buyer's anxiety. For example, you may have reached an agreement with your buyers and signed the paperwork for the sale of your home. After all of the documents were signed, however, the buyers began to behave strangely, getting somewhat agitated and making additional demands. It is important to remember that people experience a high level of stress when they are buying a house. Your buyers may be suffering from "Buyers Remorse"-- that intense feeling that they have paid too much and that the house is going to fall down as soon as they assume ownership. They may start questioning the fine points of the structural integrity of your home or ask you to include your new washer and dryer and power mower in the transaction. Don't take it personally if your buyers begin going through the "home-buying jitters". Be patient, and allow the real estate agent to do whatever "hand holding" is necessary to get the buyers happily settled in your home. See All Tips In The "Buyers Remorse" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

Q  What are considered the ideal conditions for a seller's market? A  In a seller's market, prices are firm and good houses are sold before advertised or as soon as they show up in the MLS. See More Real Estate Trivia >

The Sandy Team Santa Cruz Properties Hello and welcome. We're Sandy Kaplan & Sandy Mason, licensed Realtor® and Broker respectively. We're here to give you honest, friendly, focused, Santa Cruz real estate service. We specialize in residential sales, relocation, beach and mountain properties in beautiful Santa Cruz County and are a local, women-owned business. Sandy Kaplan is currently the President of The Santa Cruz Association of Realtors®. Sandy Mason received "Realtor® of the Year 2004" award from the Santa Cruz Chapter of the Women's Council of Realtors® in December. The difference (really) is...The Sandy Team! www.SandyTeam.com is brought to you by The Sandy Team NUMBER1EXPERTS™ in real estate for Santa Cruz, Capitola and Aptos, California, Ocean View Properties, Beach Front Properties Read The Sandy Team's Privacy Guarantee, Terms of Service, and Free & Without Obligation Pledge

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