** To Find Homes For Sale Around Atlanta ** Please Click Here


Please Try The SearchBox Above For Additional Info Within This Site

Buy Vs Rent
Paying Landlord Mortgage

Buy Vs Rent Paying Landlord Mortgage: You must have a dwelling



to call home no matter you pay a mortgage …or rent! 

Your cash outlay will amount to a small fortune for you …or it will pay your landlord’s mortgage.

The more money you make, the better place you are likely to desire and consequently more cash outlay you should expect to go out of your bank account.

That’s IS money that should build wealth ...for YOU! …NOT for your landlord.

You may not be a ‘convert’ yet – but I would like you think for of a second: Do you think that the landlord would have his/her money tied up in a property and expect a ‘loss’ year after year? 

I do not think so! As a matter of fact, landlords are ‘for profit’ organizations and – with very few exceptions - charge ways above the rate of inflation and, as the years go by, they increase the rent several folds.

Conversely ‘fix’ mortgage do not go up for the life of the loan that can be 15, 20 and more often 30 years – and still no increase!


Buy Vs Rent Paying Landlord Mortgage:
A Case Study

On my page Buy Vs Rent Cash Outlay, I make a detailed analysis based on one of my client’s rental payments living in one single apartment for 11 years.

My homebuyer made a rough estimate that he may have paid in excess of $130,000 – when he moved not one penny of that was his. All he did - all those years - was to pay the landlord’s mortgage …plus some profit!

Through our joint strategy for him to become a homebuyer, he walked away from the aged question of “buying Vs renting” and walked into the home ownership!

My client secured a FHA loan, which allows homebuyers to purchase a home with as little as 3.5% down payment ...The purchase price was $195,000 - which means that the moment he walked from the closing attorney’s office, the amount of the $6,825 he put towards his down payment can already be counted as part of his equity!

By the time he paid the first month of his mortgage ($927.95 = Principal & Interest) he already had an additional $ 269.78 to his name!

The buy Vs rent paying the landlord mortgage does not stop there: First month interest was $ 658.17 and principal amount was the above $269.78. 

It will be approximately $3,299.25 that he will pay towards the principal for the first year.

If you are wondering why the math is NOT 12 (months) X $269.78 (interest shown in the first month) = $3,237.36 - here is the reward for your thinking: Each month that your mortgage is paid, more of your dollars go towards the ‘principal’ and less and less of ‘interest!’

It continues to be so each and every passing month! By the year 16 to 17 more than of it goes towards the principal …and, the end of the life of the loan it reverses, and your mortgage payments will be almost all ‘principal’



Mortgage Interest Deduction (MID)

There is another federal incentive to homebuyers that really makes you to weigh in this buy Vs rent paying landlord mortgage discussion – it is called Mortgage Interest Deductions (MID). 

This program allows homeowners all across the country to deduct from you income 100% of mortgage interest paid every year of the loan! 

Well, there are some limits or phase out – which I would like to call attention of those of you buying home in high priced real estate marked will be caped around that figure …however it is still a great incentive – that your rental will not provide.

There is a phase out amount …Only interest on the first $1 million of debt to purchase a house or $500,000 for a married couple filing separately -- is deductible.

By the way mortgage interest on most second homes also will qualify for tax deductions as well.

Interest above this amount still can have some more limited deduction, according to the Internal Revenue Service (IRS) website.

In any case, via MID, my client will also have $5,239.21 that he will be able to deduct from his income tax next year …AND, for the 30 years, he will have $1,000s more to deduct each year although we have to keep in mind - as discussed above - that with the passing of time every payment offsets some of the principal and shrinks the interest part.


I have written about MID and other homebuyer tax incentives with more detail on my page Buy VS Rent Tax Advantages


Mortgage Insurance Premiums
Are Also Tax Deductible

Renters come shorthanded on what one can get by paying rent every month and the consideration of  buy Vs rent paying landlord mortgage  - there isn't much you can depreciate or deduct from your rent payments.

Homebuyers on the other hand will have several incentives - for instances, when you buy a home with a FHA or conventional and you put less than 20% down payment, it is very likely that you will pay mortgage insurance premium (MPI)

That is an additional cash outlay that can be offset from your tax income.

According to the IRS publication above “You can treat amounts you paid during 2014 for qualified mortgage insurance as home mortgage interest. 

The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after 2006.”

I believe that this policy should continue for the sometime to come, however per my usual recommendation – consult your tax preparer or lawyer.



Closing Remarks On
Buy Vs Rent Paying Landlord Mortgage

In closing – you need to have a dwelling to call home:

  • Rent does not offer any tax abatement and goes up most years…
  • Mortgage payments (principal & interest) is fix for the duration of the loan, even for a 30 years fix loan; 
  • there are more the one ways to save in tax deductions to include all the interest paid during the life of the loan; the principal starts to accumulate to your name from the first payment onwards ..your equity, however, starts earlier: The amount of the down payment is already part of your assets!

I have written on another page of this series that only those who will have to move in 4 years or less like those in the military ...Other than that:

a) If you can afford to pay rent, most likely you will be able to pay your mortgage

a) Landlords are not 'charities' they are in the business to make a profit

b) Beware that your rent is paying the landlord's mortgage!

The ball is now on your court! ;- )


Knowledge Base - This series dedicated to explore the Buy Vs Rent quest is comprised by 8 intertwined articles. I recommend that you further your knowledge by reading all of them - enjoy …AND learn!

Buy Vs Rent
Tax Advantages
Building Wealth
Cash Outlay Chart

Organic Wealth
New Beginning
Pros & Cons


Visitors’ Corner:
Share YOUR Tips,
Comments And Questions

Now it is YOUR turn: Please give us your input!

Do you have some great comments on this topic you would like to share? Any question burning on your head? I would love to publish

YOUR Buy Vs Rent Paying Landlord Mortgage Story / Tips

Share it here and now! No membership required. No signing in bugger here. Anyone can contribute. Yes, even professionals in the field – lawyers, social workers, mortgage consultants or even other fellow real estate agents!

Everyone is welcome: Just open your heart!

I’d love to hear from you – simply click and follow instructions below




JC Fagundes, Head Broker
EQUAL SERVICE TO ALL.
Residential. Commercial. Investments.
Ph: 404 801 4141



› Paying Landlord Mortgage

Return To The Top Of This Page

Disclosures

Contact Us

To Search All Georgia Properties Listed
On This Site, Please Click Here:
Sitemap


MORTGAGE CALCULATOR
To Calculate Your Mortgage Monthly Payments, Please Click Here:

Mortgage Monthly Payment Calculator


"All Real Estate Is Local:"
Here Are
Homes For Sale
In Many Communities
Around Atlanta that I specialize.
I Also Will Be Honored
To Serve As Your Agent -
If You Still Do Not Have One To Represent You.
Immediately below You will find links to daily updated for ALL homes for sale
in the following areas:


HOMES
FOR
SALE


Featured Property

908 Lakeside Court
Loganville GA 30052

SOLD!
In 29 days!!

Need help to SELL YOUR house?

Contact Us!!!


Homes Listed
BY COUNTY:

Homes For Sale In 
Cobb Co

Homes_For_Sale_In
DeKalb_Co

Homes_For_Sale_In
Fulton_Co

Homes_For_Sale_In
Gwinnett_Co


Homes Listed 
BY CITY

Links To
Single Family Homes
For Sale  
In Alphabetical Order

By City:

Homes For Sale In
Acworth

Homes For Sale In
Austell
Homes For Sale In
Alpharetta

Homes For Sale In
Atlanta
Homes For Sale In
Avondale
Estates

Home For Sale In
Buford

Home For Sale In
Centerville
Homes For Sale In
Chamblee

Home For Sale In
Dacula

Homes For Sale In
Decatur

Homes For Sale In
Doraville
Home For Sale In
Duluth

Homes For Sale In
Dunwoody

Home For Sale In
Grayson

Homes For Sale In
Hapeville

Homes For Sale In
Johns Creek

Homes For Sale In
Kennesaw
Home For Sale In
Lawrenceville

Home For Sale In
Lilburn
Home For Sale In
Loganville

Homes For Sale In
Mableton

Homes For Sale In
Marietta
Homes For Sale In
Milton

Home For Sale In
Norcross

Home For Sale In
Peachtree
Corners

Homes For Sale In
Powder Springs

Homes For Sale In
Roswell

Homes For Sale In
Sandy Springs
Homes For Sale In
Smyrna
Home For Sale In
Snellville

Homes For Sale In
Stone Mountain

Homes For Sale In
Vinings


CONDOS &
TownHomes
FOR SALE


Condos 
&
TownHomes
Listed By County

Condos For Sale In
Cobb County

Condos For Sale In
DeKalb County

Condos For Sale In
Fulton County

Condos For Sale In
Gwinnett County


Condos
&
TownHomes
Listed
BY CITY

Links To Condos, Townhomes and Lofts
For Sale
In Alphabetical Order
By City:

Condos For Sale In
Acworth

Condos For Sale In
Alpharetta

Condos For Sale In
Atlanta
Condos For Sale In
Austell

Condos For Sale In
Avondale Estates

Condos For Sale In
Chamblee

Condos For Sale In
Decatur

Condos For Sale In
Doraville

Condos For Sale In
Dunwoody
Condos For Sale In
Hapeville

Condos For Sale In
Johns Creek

Condos For Sale In
Kennesaw
 
Condos For Sale In
Lawrenceville

Condos For Sale In
Lilburn

Condos For Sale In
Loganville

Condos For Sale In
Norcross

Condos
 For Sale In
Mableton

Condos For Sale In
Milton

Condos For Sale In
Marietta
Condos For Sale In
Peachtree Corners

Condos For Sale In
Powder Springs
Condos For Sale In
Roswell

Condos For Sale In
Sandy Springs
Condos For Sale In
Snellville

Condos For Sale In
Smyrna

Condos For Sale In
Stone Mountain
Condos For Sale In
Vinings


Commercial
Properties
FOR
SALE


Links To Commercial Properties For Sale Or Rent: 
COBB COUNTY HUB
Commercial
Properties

For Sale/Rent In
Cobb County


DeKALB COUNTY HUB
Commercial
Properties
For Sale/Rent In
DeKalb County


FULTON COUNTY HUB
Commercial
Properties
For Sale/Rent In
Fulton County


GWINNETT COUNTY HUB
Commercial
Properties
For Sale/Rent In
Gwinnett
County



Related Pages With
Great Useful Info
to Newcomers and old-timers in these areas - where I work:

COBB HUB
Cobb County Homes For Sale


DEKALB HUB
DeKalb County Homes For Sale


FULTON HUB
Fulton County Homes
For Sale

Sandy Springs Homes For Sale


GWINNETT HUB
Gwinnett County Homes For Sale


To Calculate Your Mortgage Monthly Payments, Please Click Here:
Mortgage Monthly Payment Calculator


To Search All Georgia Properties Listed
On This Site, Please Click Here:
Sitemap