Renting? Let’s run the #’s if you’re thinking of buying
If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!
If you were to purchase your own home or condominium, you would be well on your way towards building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. Rates are still very low right now.
In addition to building equity, there are tax advantages that come into play with home-ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes.
Interest payments on a mortgage below $1 million are tax-deductible, and your Choice Finance® Loan Officer (www.choicefinance.net) should help you evaluate the tax advantages of various loan scenarios, and share this information with your tax consultant to get feedback on your behalf.
Your Loan Officer will need to evaluate your monthly household income, current assets and savings, as well as any monthly obligations you may have for credit card payments, car payments, child support, etc. These pre-qualification factors, along with your 3 credit scores, will determine how much house you can afford and at what interest rate.
FHA loans will enable you to buy a home with 3.5% downpayment! FHA lending generally states that your mortgage payment, including principal, interest, taxes and insurance (PITI) should not exceed 31 percent of your gross income, and the PITI plus other long-term debt (car payments, etc.) should not exceed 43 percent of your gross income. FHA rates are just as competitive as conventional..
Housing is an expense that takes a big bite out of the monthly budget. If you are a renter and feel that “home” is more than just some place to hang your hat, it may be time to take the necessary steps of becoming a first-time homebuyer. Together let’s devise a game plan that works for you, and let’s get you going to help you build your personal net worth as a home owner.