WHY YOU SHOULD STOP RENTING AND BUY A HOME NOW LEX LEVINRAD
Prices have declined so much over the past few
years that in many cases, if you purchased a
house, your monthly payment could actually be
cheaper than if you rented it. This is true even after
accounting for property taxes, home insurance,
maintenance and repairs. And, aside from the
monthly housing cost, historical housing data
suggests that continuing to rent instead of buying a
home will cost you dearly in the long term.
We compared the costs of purchasing a typical 3
bedroom 2 bathroom entry level home to the costs
of renting that same home. While we used a home
Current FHA regulations require a 3 ½ percent
in Florida as an example, the same holds true in all
down payment which would be $4,550 for a
50 states, since the HUD housing data provides
$130,000 home. The monthly mortgage payment
existing home sales data averages for the entire
(principal and interest) on a 30 year fixed mortgage
U.S. The price of the home that we used as an
at an interest rate of 3.5% would be approximately
example
approximately
$700. Property taxes would be about $133 per
$130,000 and would rent for about $1,200 per
month, including the homestead exemption. Home
month.
Insurance would be about $150 per month. Adding
would
appraise
for
up the mortgage payment, property taxes and
insurance, a first time home buyer would have a
total monthly payment of $983 per month, which is
cheaper than paying $1,200 to rent the same
home. And, this is even before considering the tax
advantages and deductions of being a homeowner,
as compared to being a renter. Other advantages
include having insurance for your possessions, a
fixed payment that never changes (if you have a
fixed rate mortgage) and knowing that you will not
be forced to move or have your rent raised every
time your lease expires. The main disadvantage of
owning a home would be repairs and maintenance,
but with the above example you are being
adequately compensated to own the home versus
renting it (by $217 per month).