There are many advantages to buying a home in Omaha. Many of our clients look forward to the little things, like being able to remodel or redecorate without having to ask someone else for permission. Others look forward to the feeling of really putting down roots in a community.
However, what most of our clients don’t realize is there are real financial benefits of owning a home. We went ahead and crunched the numbers for you based on the average home price in Omaha, current interest rates, forecasted home appreciation rates for Douglas County, and more. If you’re not a numbers person, feel free to skim over the next section.
The numbers
Homeownership:
- Average home price in Omaha: $209,000
- 20% down payment: $41,800
- Closing costs: $2,500
- Interest rate: 3.5%
- Term of loan: 30 years
- Property tax (annual): $4,326
- Homeowners insurance (annual): $732
- Maintenance and repairs (annual): $1,044
- Forecasted appreciation: 4.05%
Renting:
- Comparable monthly rent: $1,445
- Monthly renter’s insurance: $22
- Forecasted rent increase: 4.3%
Based on the numbers above, buying will save you $48,884 in cashflow alone. As you can see below, over the course of 9 years you would spend $139,269 on housing expenses as opposed to the $188,153 you would spend to rent.
In addition to saving cash, based on the forecasted appreciation rate your $209,000 home would be worth $298,799 after 9 years. That’s an increased value of $89,799!
And don’t forget about your equity. At the end of 9 years, your remaining principal balance would be $133,853. Meaning, you’ve built $33,347 of equity in just 9 years!
When you add up the money saved on monthly payments, home appreciation, and equity then subtract your initial down payment, closing costs, and any money it would take to sell, you will have gained $151,602 from buying a home in Omaha rather than renting one.
To figure out your net gain of buying a home in Omaha, complete the following equation:
Appreciated Home Value [$298,799] – (Down Payment [$41,800] + Closing Costs [$2,500] + Cost to Sell [$17,928] + Remaining Principal [$133,853]) + Cashflow Difference [$48,884] = Net Gain [$151,602]
Buying is like investing early…but better.
Say you would have taken the money for your down payment and closing costs, and invested them instead of buying a home. At a return rate of 6% every year, you would have only made about $74,844 over the course of 9 years. Instead, you made a whopping $151,602.
Buying stabilizes your budget.
Rent is always increasing. With a fixed-rate mortgage, you know what your monthly payments are going to be for the next 30 years, which allows you to better budget your money. Below is a graph depicting the rent increase alongside the steady house payment from our aforementioned scenario.
Buying forces you to save money every month.
Part of your mortgage payments each month goes to the principal balance of the loan. With each month, your equity increases helping you to build wealth.
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In short, buying a home in Omaha can save you a lot of money, along with plenty of other benefits. Feel free to reach out to us at 402-991-5153 with any of your home ownership questions. We’d love to take some time to go over your financial situation and see which mortgage will best fit your needs.
Ready to start the mortgage process? Our online application takes anywhere from 5-20 minutes to complete. Once it’s submitted, we can have you pre-approved for a loan in just a few hours.
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