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November 2, 2015 6:07 pm
Lately, I have been contacted by several people looking for a rental home. Their budget was between $1,000 and $1,200. Every time I had to deliver the bad news that only a few homes were available. The disappointment was measurable. And not only that, the listings were snatched up and disappeared by the hour.
To make things worse, some didn't qualify for earning 3 times the rent amount and having a credit score of 600 at a minimum. Oh, so much frustration to deal with.
People prefer to believe that they are forced to rent and cannot afford to buy. For the sake of the argument, let's compare a 2 bedroom town house offered for rent and one in the same subdivision offered for sale.
Rent: $1,095/month or $13,140/year.
For sale price: $110,000
With a conventional loan and 20% down payment: $473/month or $5,676/year.
With an FHA loan and 3.5% down payment: $612/month or $7,344/year.
The obstacle is, of course, the down payment. 20% down equals to $22,000 but 3.5% is only $3,850.
If $3,850 still sounds much, how about signing a lease and giving the landlord rent + security deposit up front. You'd be halfway there already.
The beauty of owning your own home is that the monthly payment stays the same for 30 years. Just try asking your landlord for a 30-year fixed rent lease!
My advice is to sit down with a calculator and start crunching numbers. If you can pass the hurdle of the down payment you'll save bunches all year round.
I'm always there to help. Give me a call at 770-885-0521.