But how does building in equity through home ownership work? In this way, a home can become a buyer’s greatest financial asset. One of the main reasons people opt into purchasing a home is for how it allows them to build in equity. Results also don’t take into account the standard variable interest rate changing over the life of the home loan. It should be noted, however, that the calculator only provides estimated results, and further independent research should be conducted with a qualified and experienced mortgage broker or financial adviser. Of course, you are able to alter these assumptions so that they best mirror your circumstances or plans, especially if you are in a position to know the precise figures of each. The analysis has also been clocked to reveal your results after 7 years. There are certain deciding factors and assumptions already pre-set by the calculator, which will help to determine your results such as your annual rent increasing by 2.5%, your return on invested funds at 5.3%, the yearly appreciation on the home tracking at 1.8% growth, and your annual home maintenance costs sitting at $3,000. The calculator will ask you to provide some information which includes the monthly rent paid for your rental accommodation, versus, your property’s purchase price, the total amount of money you will need to take out on a home loan, the total lifetime or period of the loan, the amount of interest you will pay on the loan, the quarterly council rates to be paid, and the costs of buying and taking out a loan with a lender. In order to assist you in making an informed decision on whether to rent or buy, the calculator will show you how your finances are expected to look like several years after you buy a house or continue to rent a property. Your Mortgage’s Rent or Buy calculator will help you to uncover how much better off you could financially be if you were to rent, compared to if you were to buy. So which option - renting or home ownership – is most likely to advance your finances in the long-run? Whilst one option is most admired for its flexibility yet attached to the ‘rent money is dead money’ stigma, the other is appealing for the security it provides, but not for the additional interest rates that are entailed. Still, the renting versus buying dilemma continues to be heated, with the benefits and set-backs of each option thrown around, back and forth. Over the past 25 years, median house values have risen by a mammoth 412%, having tracked an annual growth rate of 6.8%, according to a recent CoreLogic report presented by Aussie. Should you rent or buy? Improving your financial future
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