Why Buying is Better Than Renting!
YouTube Link- https://youtu.be/loUj3R8Kke4 <Click Here
This loan is specifically with Ginnie Mae.
The Primary Mortgage Market
(The Most Common Loan)
The primary mortgage market is made up of the lenders that originate mortgage loans. These lenders make money available directly to borrowers and make their income from finance charges and charging interest.
Example of Primary Mortgage Market
Banks, Mortgage Brokers, Mortgage Bankers and Credit Union
The Secondary Mortgage Market
Various Agencies (It could be Investors or Business Companies that purchase existing mortgages from banks and Savings associations and assemble those mortgages into packages called “Pools or Blocks”
Three Types of Secondary Mortgage Market
1. Fannie Mae
The Federal National Mortgage Association
2. Ginnie Mae
The Government National Mortgage Association
3. Freddie Mac
The Federal Home Loan Mortgage Corporation, Similar to “Fannie Mae”
What is Ginnie Mae?
The Government National Mortgage Association
It’s a type of loan that you can use. Ginnie Mae is a government agency that supports mortgage lending. It guarantees mortgage-backed securities (MBS), which are investments backed by home loans insured by the FHA and VA. Investors buy Ginnie Mae pass-through certificates, which give them a share of the monthly payments homeowners make on these loans. Ginnie Mae ensures that investors receive their payments, making these investments safer.
Is it better to buy or rent?
IT DEPENDS on many reasons or factors
THE CHART IS IN THE VIDEO
The chart (IN VIDEO) compares the costs of renting versus owning a home over seven years.
For the renter:
They start by paying $800 per month in rent, with the rent increasing by 5% each year.
For the homeowner:
They buy a home for $110,000 and have a monthly mortgage payment of $1,000.
After six years, the homeowner’s monthly payment becomes lower than the renter’s monthly payment.
Additionally, because homeowners can typically deduct mortgage interest and property taxes from their income taxes, they enjoy tax savings. These savings mean that after just three years of homeownership, the homeowner’s monthly payment (after accounting for tax benefits) becomes less than what the renter is paying.
In summary, while the homeowner starts with a higher monthly payment, it becomes lower than the renter’s payment after six years. Moreover, when factoring in tax benefits, homeownership becomes more financially advantageous than renting after just three years.
