So, clearly, the Mortgage costs more per month. In this case, about $300 more per month. That seems like a lot. But, lets see what advantages that extra money buys you.

Tax Deductions Comparison:

• Amount of your Rent per month that is tax deductable: $0 / month
• Home owner's Mortgage per Month: $1360 (approximate figure)

About 85% of a typical monthly Mortgage payment is fully deductable interest and real estate tax. So, that means at the end of the year, when you own your home you'll be able to deduct 85% of every dollar you pay in your mortgage off your taxes! In this case, you'll be able to deduct about: $16,320! That will save you thousands of dollars in both federal and state income taxes. Renters get NO such tax advantage.

Equity Build Up Comparison:

• Renter's Equity Build up per Month: $0
• Home owner's Equity Build up per Month: $140 (approximate figure)

Since about 85% of a mortgage payment goes to Interest - the remaining 15% will be applied towards the principal of your mortgage. That means that about 15% of each payment will pay down the principal on your Mortgage. So, as a home owner, you'll build up equity each month. In this case, you'll build equity at $140 per month, whereas the renter will build nothing. The renter's money is simply gone.

Property Appreciation Comparison:

• Renter's Appreciation per Month: $0
• Home owner's Appreciation per Month: $1375 (assume 6% annual appreciation)

Renters don't own property - so if the property increases in value - they gain nothing.

Home owners on the other hand reap the benefits. In the above example, a very conservative one, the homeowner's home will gain 6% in value each year. So, on a $275000 house, 6% per year would be $16500 in the first year - or $1375 per month! The Hawaii, and especially the Hawaii real estate market has seen several years in a row of much higher appreciation. Last year, homes appreciated as much as 30%! As a renter, you gain nothing when homes appreciate. Homeowners on the other hand reap the benefits of appreciation by owning their own property.

Lets Total it up:

Lets total up the various costs and gains of renting vs owning your home:

	Renter:	Homeowner:
Monthly Cost:	$1300	$1600
Annual Cost:	$15600	$19200
Annual Tax Deduction:	$0	$16320
Annual Equity Build Up:	$0	$2880
Annual Appreciation:	$0	$16500
Total Annual Costs:	$15600	$19200
Total Annual Gains:	$0	$2880 (Equity Build up) + $16500 (Appreciation) + $16320 (Tax Deduction)

As a renter you're only paying - you only have costs. You can gain nothing.

As a home owner, you gain in three significant ways: Equity Build Up, Appreciation, and significant tax deductions. You gain so much owning your own home, it almost pays for itself in the gains and tax savings you receive.

Its clear that as a home owner - you're far better off than the renter!

How can I afford to own my own home?

Its easier than you think! There are literally thousands of loan programs available, and many programs to help first time home buyers. We can help.