How can I afford my monthly payment?

Tax Advantage of Home Ownership:

One of the question first time home buyers ask, is how can I afford this house payment vs the rent payment I am making today.

It’s a great question, and before I answer how you can benefit from the tax laws, let me recommend that you speak to your CPA, Tax Preparer or Financial Planner.

What the tax rules state today is that your mortgage interest payments are deductible as well as your property [Real Estate] taxes. The key here is to do some planning (with the professionals I mentioned above) to determine how much you can deduct from your income, to pay less in taxes.

The key is that once you know your total tax deductions for the year, you should go to your employer and adjust your W4 exemptions. What this means is that you can adjust your exemptions so that each month less taxes are taken out of your paycheck and you can use those funds to help pay your monthly house payment.

Building Net Worth:

And, if you check out the table below, you will see if you purchased this home for $395,000 with an appreciation rate of 4.4%, at the end of 5 years, you would have created nearly $131,000 of net worth.