Rent or Buy?

Rent or Buy
Rent or Buy? (from simplifyingthemarket.com)

There are some people who have not purchased a home because they are uncomfortable with taking on the obligation of a mortgage.  You should realize that, unless you are living rent-free (such as in your parents’ basement), you’re paying a mortgage.  Regardless whether you Rent or Buy, you are paying someone’s mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, R. L Adams explained in his article, 12 Practical Steps to Getting Rich,”

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

Rent or Buy

As a home owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 3.94% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

(from http://www.simplifyingthemarket.com/en/?a=331591-e956e3da05580ddb18884dc0329c1fa6)

What do first time home buyers need to know?

Home buying tips and fundamentals for

first time home buyers

Don’t let your first time home buying experience be overwhelming. Before you plan your Sunday trip to open houses, it’s important to review the fundamentals and make sure you are going into your home purchase fully aware of the responsibility you are about to take on, as well as prepare you for the process and pitfalls that may come your way.

The first item on the list is to determine how much you can afford. Affordability is determined by your financial state and interest rates. Your financial state includes factors such as your income, debt, savings, and expenses. Interest rates impact on your ability to purchase a home because your monthly payment is based on the rate you lock into; the higher the rate, the higher your payment. To determine how much you can afford, you need to contact a mortgage lender for a pre-approval (I am happy to provide you with several names of licensed loan officers).

Once you know how much you can afford, make a housing budget. Making a housing budget can help you understand your expenses, which included utilities, maintenance, and other expenses such as cable and internet. Additionally, take into account any interest rate adjustment (if you have an adjustable rate mortgage) and increasing real estate taxes. Many first time home buyers get into trouble because they underestimate their monthly housing expenses.

Knowing your rights as a home buyer can help you too. Learn about consumer protection laws such as RESPA (Real Estate Settlement Procedures Act), Equal Credit Opportunity Act, Fair Credit Reporting Act, and the Truth in Lending Act. You can get more information about these laws from the Consumer Financial Protection Bureau (consumerfinance.gov).

As a first time home buyer it is important to know that you have the right to choose your service providers (except for certain circumstances), such as real estate agent, lender, title attorney, insurance provider, etc.

Your next step will be to choose a real estate agent. It is recommended to interview several agents before choosing as your agent will be your trusted guide through the home buying process. A good buyer agent is not only a good negotiator, but does their best to protect your interests.

For more information, please contact me or complete the form below: