The Real Cost of Homeownership
(An Example)

The purpose of this illustration is to estimate the monthly real cost of home ownership for the first year in a home when you consider important factors such as taxes and appreciation.  Interest and property taxes are tax deductible and should be considered when comparing renting vs. owning.  For this illustration, a 36% tax bracket and 2.5% appreciation are assumed, however the California Association of Realtors forecasts an 10% increase in median home prices for 2003.

 

Home Purchase Price: $300,000
Loan Information:
Loan Amount (0% down):
Interest Rate:
Term of Loan:		 .
$300,000
7%
30 yrs
Monthly Costs:
Loan Payment:
Property Tax:
Insurance Premium:		 .
$1,995
$312
$75
Total Monthly Investment: $2,382
Monthly Credits/Income:
Tax Deductions:
Interest:
Property Tax:
Total Tax Deductions		 .

$1,750
$312
$2,062
Total Tax Deductions:
Tax Savings (36% Tax Bracket):
Principal:
Appreciation (2.5%):		 .
$742
$245
$625
Less Total Monthly Credits/Income: $1,612
Estimated Real Cost of Home Ownership (Year 1): $770

 

This example makes certain assumptions that are unique to each individual's situation.  If you would like an analysis prepared specifically for you, please contact me. 

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