When considering whether to rent or buy a home there are two questions to consider first. How long do you plan to stay? What are your future plans? If
Too Rent Or Buy
When considering whether to rent or buy a home there are two questions to consider first. How long do you plan to stay? What are your future plans? If you are planning on moving or going after that big promotion with corporate relocation then renting may be right for you. Renting tends to be for the short term. Buying is more long term. With the average apartment rent near or over $800.00 per month it makes purchasing a more attractive option. Ginnie Mae did a cost comparison for a renter and a homeowner over a 7 year period. The renter starts out paying $800 per month with an annual increase of 5%. Let's say a new homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000. After 6 years, the homeowner's payment is lower than the renter's monthly payment. There are tax savings of home ownership, and the payment is less than the rental payment after 3 years.
Homes and land historically gain value. While there are other factors to consider before purchasing a home like taxes, maintenance, and interest rates. Whether renting or buying it helps to know what is on your credit report and your credit score. A higher credit score helps you secure the best interest rate. Lower interest equals money saved. Most lenders are going to require your last two years in tax returns and previous three months in bank statements. Lenders are looking for income and bank account stability. Another factor you should be aware of is debt to income ratio. Essentially how much money you earn vs how much you owe. The lower your debt to income ratio the better. If the decision is to purchase, you will also have to overcome the down payment hurdle. The Koerner Team works with a wonderful down payment assistance program, contact Kyle to learn more about this exciting program.
We are here to help guide you through the process. Whether renting or buying is currently right for you, we are here to be your trusted adviser. If you have any questions do not hesitate to reach out to us. We would appreciate the opportunity to earn your business. Have a joyous Holiday Season.