expensesDID YOU KNOW THAT YOUR PRIMARY MONTHLY EXPENSES AS A HOMEOWNER COULD COST YOU LESS THAN RENTING AND SAVE YOU MONEY?  Please find an example below comparing 2 town homes located within the same neighborhood of Hedingham here in Raleigh. Hedingham was chosen as it has both privately owned homes as well as a large section of rental homes that are very similar.  Both homes used in the following comparison have virtually the same floor plan with a single car garage. One sold in September of 2016  and the other was recently advertised as a rental.


  • RENTAL HOME: The rental office advertised the home used at $1225/per month for Rent.  Average renters insurance (according to my insurance agent in Raleigh) costs approximately $20/month – increasing the total expenses cost to $1245.00/per month.
  • HOME SOLD: The privately owned townhome recently sold for $150,000.  Using an interest rate of 4.0%* (APR 4.272%)*on a FHA 30 Year Fixed Rate with 3.5% Down Payment, the estimated Payment Breakdown is: P&I (Principal & Interest) $703.15 + $102.53 Mortgage Insurance + $108.75 Taxes + $58 Homeowner /Hazard Insurance = $972.43 House Payment/per month.    Note:  The HOA (Homeowner Association) Fee for a town home in this community is $108/month making the Total Cost $1,080.43/per month.  That’s a savings of $164.57/month or $1974.84 annually when compared to the rental property.not counting the interest write off received with home ownership        *rates subject to change

If you do not have the money saved for the down payment, you should know that FHA allows gift money from family members as well as other parties not demanding any form of pay back notice.  Another source for down payment could be your income tax refund or if you have a 401k Plan with your employer (you would need to check with company for details).  In addition, you may be able to qualify for special programs that offer down payment assistance.  If you have questions – I can connect you with a local lender to discuss your options and answer any questions you may have.


  • When you pay your rent, your money is GONE forever!! Never to be seen or used again.
  • When you purchase a home, the monthly Principal payment on your mortgage goes toward paying down the balance you owe and increases your equity in the home.
  • The Interest part (the largest portion over the first 10 years or so) is tax deductible. This deduction will either lower what you pay in taxes or will increase your tax refund.  Many people opt to change their deductions on their W4 form at work so they can use the income to offset other expenses or increase their cash flow.
  • Your home should increase in value over the years. The townhome used in the example originally sold for $120,000 in 1999 which is a $30,000 increase in value over the past 18 years!
  • The analysis above is based upon purchasing a town home with $108 HOA dues. Purchasing a single family home in the same community drops the HOA to $40/month, another $68/month in savings.

This is not an endorsement of homes in Hedingham, although there is nothing wrong with this community and I have sold many homes here.  The same principal of saving money and having a home you can call your own applies anywhere.  If this makes sense to you and you wish to discuss in more detail or wish to talk with a local lender, PLEASE CONTACT ME!! NO Pressure, No Hassles and NO Obligation !


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