Reply to What can I afford with 210K joint income and $300K down payment?

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[quote=Anonymous]If you want to calculate what the tax benefits would be for ownership:

You probably need to figure out what insurance and taxes would be.  Taxes in Arlington, for example, run about 1% of tax assessed value per year, looking at a few examples on franklymls.  Not sure about insurance; I probably pay about $200/mo on my home assessed in the low 700's.  (most of that is land value.)

Use an online mortgage calculator to give you the payment streams for several different mortgages.  Try $600K, $500K and $400K.  (with $300K down.)  Right now, you are comfortable paying $2,600/mo, assume $700/mo would be tax and insurance, for a mortgage payment of $1,900, which is just about the payment on a 400K mortgage if you get a decent rate.  Run $400K through the calculator, look at the amortization schedule and you'll see that in the first year, about $14,000 of what you pay will be interest.

If you were to redo your taxes for the year, you'd add that $14,000 to the itemization schedule A.  Plus the real estate taxes paid.  (And also closing costs, I think, but you're looking at the long-term here.)  How would that have changed your bottom line, i.e. your adjusted gross income and therefore your tax owed?  Divide that by 12, and that is the extra amount over $2,600/mo you can spend on a house vs. renting.

(Assume that you also will have maintenance costs, and don't forget about utilities, HOA dues, etc. if you're not currently paying anything like that.)[/quote]

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