Buying vs Renting

Buying vs Renting

Home Ownership

Owning A
Home
Renting
Mortgage interest is tax deductible Rent is not tax deductible
Each mortgage payment goes into building your nest egg. Every rent payment disappears forever.
Equity in your home can pay for your kids' college education. Rent checks pay for your landlord's kids to go to college.

Your payments stay
the same with a fixed rate loan.

Your rent increases each year.
Your children get to play in your own yard. Your children play in a parking lot.
You do laundry whenever you feel like it, even while watching tv. You have to do your laundry once/ week and sit in the laudromat.
You enjoy greater privacy.

You know your neighbor's musical tastes better than you know your neighbor.

Pride of Ownership. Pay less monthly for housing.

Should you buy or should you rent? This is a complicated question for thousands of consumers. Not only is this question loaded with personal and lifestyle considerations but financial issues as well. For some, buying is the only thing to do, and for others, renting is much more convenient. Most Los Angeles homeowners enjoy the pride of owning such a large investment, and others enjoy a place to call 'home.' There are several advantages that go along with Los Angeleshome ownership.

Tax Breaks

Federal tax laws strongly favor homeowners. Mortgage interest that you pay is generally tax deductible on your federal return. This can provide you with substantial tax savings. Gain exclusion rules allow you to profit without paying taxes (to a point) when selling your principle residence. Please consult your legal or tax expert for restrictions and application of this popular benefit.

Ability To Borrow Against Equity

As a Los Angeles homeowner, you can borrow against the equity in your home using either a second mortgage or a home equity line of credit. The interest on such loans may be tax deductible, regardless of how you use the money. Many Los Angeles homeowners use home equity loans to consolidate high-interest loans, to make repairs and improvements, and even to fund a child's education.

Renovations

As a Los Angeles homeowner, you have almost unlimited ability to adapt your living space to suit your individual tastes and needs. You can paint, wallpaper, decorate, landscape, and even have the potential to add more rooms. The possibilities are virtually endless.

Leverage

When buying a Los Angeles home, you will probably use some of your own money (your down payment) and a large amount of someone else's money (borrowed funds from your bank or other mortgage lender). This "leveraging" maximizes the use of every dollar.


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