Thursday, March 30, 2017

The cost of Getting into a Home vs. Getting into a Rental


Thinking about making the move from being a renter to a buyer? Afraid about what it might cost to do so? Here are a couple of quick facts that might ease your fears.

When renting a home or apartment in the Treasure Valley area, in many cases you may need to be able to provide first and last months rent and a security deposit. This could be upwards of $3000-$4000 that you might need to just to secure that lease.

When purchasing a home, you might be surprised, but if you have good credit, you can typically get into a home for as little as $500-$1000. How, you say?

Well, in many cases, you may qualify for some of the fabulous $0 down programs that are geared towards consumers that have worked hard to take good care of their credit. Pay your bills on time, carry a few lines of credit but not too crazy? Maybe a car payment, Visa and a store card or two? Keep those credit card balances under 30% of your borrowing capability? You very well may qualify for the IHFA, Good Credit Rewards program. This program puts you into a typical loan and then allows you to borrow the down payment of about 3.5%. When making an offer on the home, you’re likely going to need at least $500 to $1000 “deposit” or what we call Earnest Money. This money goes towards your down payment, so you may even be able to get it back at closing if you indicate to your lender you’d like to finance the full purchase price of the home and include your closing costs in the loan.

Even better, what you may not realize, is that unlike a lease, a mortgage is actually paid in arrears. This means that you don’t make a mortgage payment until after the 30 days you’ve lived in it; whereas, with a rental, you pay in advance each month. It’s get’s even better…if you sign the paperwork on your loan for the purchase of your home, you may have almost two months before your first payment is due. This is a terrific way to ensure you have a few extra funds to cover the cost of a move.

With rental vacancies hovering around 2%, landlords are able to charge quite a bit on their monthly rates. In most cases, you will likely be able to purchase a home for a lower monthly payment than you can rent. This is a perfect time to call this favorite REALTOR®.

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