Once again, I was at a meeting with a couple of Realtors and Dan Keller, Everett Mortgage Advisor and we were discussing how to answer the question, "Is now a good time to buy, or should I continue to wait?" I learned that whether renting is better than buying depends on many factors, particularly how fast prices and rents rise, how long you plan to stay in your home, and most importantly, evaluating the cost of renting vs. buying in “your” particular community.According to Trulia, the cross-over point is about 15 times annual rent, the company believes. In other words, as a rough rule of thumb, homes are probably fairly valued in a city when they cost about 15 times a year's rent.
So, for example, if you're paying $10,000 a year to rent a place, think twice about buying a home that costs more than $150,000. Dean Baker, economist at the Washington, D.C. Think-tank The Center for Economic and Policy Research, came to a similar conclusion in research on the subject in recent years. “Fifteen times is the historic average”, he said.
CLICK HERE To Download A Full Size Copy of the Rent v Own Flyer
Looking at the numbers above, the total mortgage pmnt on a $200,000 FHA purchase is $1,337/mo (that includes principle, interest, PMI, taxes, and insurance. Compared to $1,100/mo rent, it’s more expensive, but don’t forget to look at the tax breaks from owning (interest and property tax write-offs). The bottom line, at $200,000, it makes sense to buy. A savings of over $119,000 over 12 years versus renting! Plus, rent will go up with inflation, your 30-yr fixed mortgage is fixed and more money over time goes straight to paying down your mortgage. Contact me for more information or to request a personalized mortgage planning analysis with Dan Keller, he can be reached at the address below:
Dan Keller, Mortgage Advisor
Looking at the numbers above, the total mortgage pmnt on a $200,000 FHA purchase is $1,337/mo (that includes principle, interest, PMI, taxes, and insurance. Compared to $1,100/mo rent, it’s more expensive, but don’t forget to look at the tax breaks from owning (interest and property tax write-offs). The bottom line, at $200,000, it makes sense to buy. A savings of over $119,000 over 12 years versus renting! Plus, rent will go up with inflation, your 30-yr fixed mortgage is fixed and more money over time goes straight to paying down your mortgage. Contact me for more information or to request a personalized mortgage planning analysis with Dan Keller, he can be reached at the address below:
Dan Keller, Mortgage Advisor
(425) 350-7136
dan.mortgageadvisor@gmail.com
I hope that you found this blog entry valuable and I look forward to seeing you around!
I hope that you found this blog entry valuable and I look forward to seeing you around!
Todd