Buy a house now! Keep renting - Wait out the market!
How many times have you read a similar article about the pros and cons of buying a home versus renting. Of course, there are many points on each side of the debate that are very valid. Each point must also be evaluated by the audience on the merits to their own particular circumstances.
The attached document shows graphically where the numbers fall. It is based on the following variables: FHA 30 year fixed rate purchase loan, credit score of 640 minimum, normal property taxes and homeowners' insurance, property appreciation & rent increases of 2% per year. Most people stay in their homes 5 years but the longer term benefits after 12 years are also illustrated.
Even though the monthly payment of $919 is more than the expense of renting at $800, the amount of monthly expense is lower when buying when factoring in the tax deductibility of mortgage interest, mortgage insurance, and real estate taxes. Further, since the principal amount of your payment is actually going toward your equity, the net amount of your monthly housing expense is even less.
The home price used in the example of $125,000 would actually rent in a range of $1000 to $1200 per month. See? You can buy more house than you are renting now and do it for less money!
Most home prices in Oklahoma have remained very stable throughout the burst of the bubble in most of the rest of the country. There are some bargains out there and you should engage a REALTOR® to help you find those bargains.
But before seeking help finding a home, you need to find out how much you can afford. This leads to the best bargain in housing today. Rates continue to be at historic lows, and I will write in an upcoming post about the potential cost of waiting out the real estate market for the lowest home price possible.
Every person's situation is unique. As much as we would like things to be cut-and-dried, I can't recommend anything to any prospective buyer without first having some conversation about your needs, your goals and your circumstances.
Call today to get your self on the Path2Buy your new home.
Tim Epps
Sr. Loan Officer
Fairway Independent Mortgage Corp
918-528-4010
tim@myfairway.net
I am turning over the content of my next few posts to answering your questions.
What do you want to know about mortgages? This is your chance to get answers in plain English.
Do you want to know about:
- Qualification
- Rates
- Loan types & terms
- Rent vs Buy
- How to select a mortgage professional/REALTOR, etc.
- Should I refinance
I will provide straight-forward answers to your pressing mortgage questions. Send an e-mail to tim@myfairway.net or call me with your question. Your contact information and any personal identifying information will be kept confidential.
Tim Epps
918-528-4010
tim@myfairway.net
When you ask a mortgage professional what his rate is, you must first know if you are rate shopping or evaluating a professional. Borrowers shopping for the lowest rate are almost always guaranteed to pay more for their loan - either in rate, fees, or both. Borrowers who are evaluating what mortgage professional they want to work with are much more likely to get the best loan available for their needs and circumstances. That is, if they understand how to make their evaluation.A lender who blindly quotes a rate, who responds immediately to your rate question with "4.75%" or "I can get you 4.x", is being dishonest at worst & disingenuous at best. Mortgage rates are not like produce prices, posted in the grocery store for all to see and available to all buyers. Many factors go into getting the best mortgage for you.Some factors are based on your circumstances:- Your credit score
- Your down payment (or loan-to-value for refinances)
- The amount of your loan
- Are you ready to lock your rate now?
- How long before you need to close?
- Are you a teacher, veteran, policeman, fireman, first time home buyer, etc?
Other factors are based on your needs:- How long do you plan on living in this home?
- Do you plan on refinancing in the future?
- Do you prefer a lower payment or lower costs?
- What is your tolerance for risk?
Only an open, honest conversation with a mortgage professional will illustrate how each of these factors influence the mortgage rate that is available on the best loan for you.If you are in the market for a home now and would like to discuss your situation or if you have a home and would like to see if you can save by taking advantage of rates near historic lows, contact me. There is no obligation. You owe it to yourself to see what a proper mortgage interview can do for you.Tim Epps918-528-4010 tim@myfairway.net
