Should You Rent or Buy?

Homeownership is the cornerstone of the American community. Worldwide Capital Mortgage Corp. invests in efforts that provide low- and moderate-income families opportunities to prepare for homeownership and to own a home of their own.

Buying a home is a rewarding experience. You derive a great deal of personal satisfaction from owning a home. Homeownership allows you to build up your personal net worth over time. Moreover, continued increases in housing prices in Long Island makes homeownership a relatively attractive investment.

 But there's more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too. And interest will compose nearly all of your monthly payment, for over half the number of years you'll be paying your mortgage. This adds up to hefty savings at the end of each year. And you're also allowed to deduct the property taxes you pay as a homeowner. If you rent, you write your monthly check and it's gone forever. Another financial plus in owning a home is the possibility its value will go up through the years.

Let's look more closely at the mortgage interest deduction since that's the most concrete advantage. In the early years, most of a mortgage payment is interest. Even in the tenth year, the payment is still 75% interest. All of that interest is tax deductible, as are your property taxes. If your deductible mortgages expenses, state and local taxes, charitable contributions, and other deductible expenses exceed the standard deduction of $4,400 for singles ($7,350 for married couples), you get to itemize your deductions. If you are in the 28% tax bracket and can beat your standard deduction by $10,000, you will save $2,800 in federal income taxes and probably reduce your state taxes, too.

 Home ownership in Long Island comes with lots of financial advantages. Instead of putting money into a landlord's pocket, you are building up equity in real estate. After a few years, your mortgage payments will probably be lower than rent for comparable space, and the interest you pay on the mortgage usually blows the standard deduction out of the water. All of these factors can make buying a home with Worldwide Capital Mortgage Corp one of the best financial decisions you'll ever make.