Should you continue to Rent or is this the time to Buy a Home
Realtor Mag's March 22nd blog - Study: Buying a Home Is 44% Cheaper Than Renting - brings up the question of what is best for you!
While there are many many things written on this topic - and while many real estate agents will say you should BUY - I have my own philosophy which centers around YOU.
First, before you explore the Rent vs. Own calculators, ask yourself these key questions:
Do you want to be living in the Houston area in 2 years from now?
If you hope to move someplace else - or think you will be transferred - then you should not purchase a home as you may not see enough appreciation in the price of the home to be able to sell the home without having to go to the closing table with a few thousand dollars to cover some of the closing costs. If you are not sure if you will have to move or not, you may want to explore purchasing a foreclosure where you will have some built-in equity.
Are you comfortable renting?
Is the landlord repairing things as needed or driving you nuts? Are you concerned you will see a sharp increase in your rent when your lease renews? One of the great things about Owning vs. Renting is that the home is YOURS! You can paint it and decorate it as you wish. You will know what your payment will be next year and the year after that if you get a fixed rate loan.*
(* While your payment for the mortgage will not increase, taxes and insurance may increase affectly increasing your overall payment amount. Still, this is something you can project more than the basic whems of a landlord who increases your rent because they feel then can. Also, if you stay for the term of the loan then you will have no monthly payment. If you rent, you have no built-in equity acruing nor do the payments ever end.)
What are your tax advantages?
This is one of the most important questions to ask yourself. When you purchase a home, for the first half of the loan, most of your payment is "interest" collected by the lender. This interest can be written off on your taxes and can save you money when filing your taxes. I highly suggest that you talk to your accountant to see if you can benefit from this tax deduction. For example, per Amortization-calc.com, the interest payment for one year on a 30 yr loan for $200,000 with an interest rate of 4.25% in zip code 77433 and a loan start date of May 2013, would have the following interest paid:
Interest for the year 2013 - $5,639.16
Interest for the year 2014 - $8,338.10
Interest for the year 2015 - $8,187.77
Interest for the year 2016 - $8,030.96
Interest for the year 2017 - $7,867.32
Interest that is deductable on your tax return! You have nothing like this when you Rent.
The last step in this process of deciding whether to buy or rent
is to use one of these popular Rent vs Own Calculator to help you make you decision. Here are a couple of websites with a Rent vs Own calculator:
Trulia - http://www.trulia.com/rent_vs_buy/
MSN Money - http://money.msn.com/home-loans/rent-or-buy-calculator.aspx
If you want to determine how much interest you would pay, select one of the following websites with amoritization tables:
Amoritization-calc.com - http://www.amortization-calc.com
Bankrate.com - http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx
If you decided that you want to buy a home vs. rent, then give me a call!
Call Jason Gracey of RE/MAX Vintage at (281) 376-2755 and go Home Shopping.
Start you home search with my website. Use the quick links below.
Putting the "Real" Back into Real Estate 