April 23, 2018
RENTING SAVES ME MONEY, RIGHT?
Many people assume that renting is always going to be cheaper than buying a house. They actually get that idea based on the upfront costs associated with buying. Having to come up with closing costs and a down payment, in addition to taking on a monthly mortgage payment can be intimidating, leading some who want to buy feeling it is just easier and more affordable to rent.
New data shows this is particularly true right now and the result is that it’s driving up the costs of renting a single-family home.
What this can mean to you is that if you hope to buy but aren’t sure you’re ready, it’s important to research your options. In most markets, buying is actually more affordable than renting in the long term, especially if you’re looking to rent a single-family home rather than an apartment.
Once you’ve made the decision about buying you’ll need to know what those costs are going to be and how to prepare for them.
This is definitely not the time to take on any new debt or splurge on any big purchases. Even if you will be taking on a zero down payment loan package, having cash reserves is necessary for certain inevitable out of pocket expenses like:
- Home Inspection; typically costs anywhere from $600-$900 depending on the inspection.
- Loan application fees; these vary from lender to lender and the disparity can be quite substantial
- Closing costs; typically from 3-5% of the sale price of the home but not including your down payment
- Moving costs; including utility deposits, movers, or other unexpected expenses you may encounter
The purchase of a home will likely be the single largest financial investment you will make. This causes most people to ask the question “When is it the RIGHT time to buy a house?” That answer will vary greatly based on personal circumstances. When you need it, when you want it and when you decide you can’t afford not to make the investment in your future financial security.
If people really had the full story of rental cost versus ownership value would that change the decision they would make?
CONTACT ME NOW to ask all the questions you’d like to ask and get all the answers you need to make the right decision for you.