Feature Property - Historic Property with 48.99 Acres

Should You Rent or Buy?

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.