Michael Creed's Blog

Rent or Buy?

For those of you that are homeowners, please share this with your renting friends! 

For many people, buying their home makes the most sense, and for many others, renting is the better choice.  To help determine which is best for you, it's wise to first determine if you can indeed afford to buy.  Once this is done, you then need to look at other factors, including the time you intend to stay in the new home, the likelihood of your new home appreciating and any increase you may see in property taxes.

Below are a few questions that you can answer to help determine what's best for you.

Down payment: What best describes your access to one?

• I have zero savings and no access to one lump sum
• I have some savings, access to a modest lump sum, or both
• I have access to a substantial amount of money

I have zero savings and no access to one lump sum

Recommendation: You should rent due to your lack of access to cash. 

Here's why: First off, there are little-to-no zero down payment programs in the current market place.  Secondly, not having the funds available for a down payment, or for a "rainy day" will not look well when the underwriter reviews your overall credit risk.

Consider this: If you want to be able to purchase a home in the future, I would suggest that you start saving at the most aggressive pace possible.  If you stick to your plan, you will see that it adds up quickly and, before you know it, you will be able to buy!

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I have some savings, access to a modest lump sum, or both

Recommendation: You may be able to buy in this case because there are many low-down payment options available. 

Here's why: I said, "you may be able to buy..." because, aside from the assets you have or have access to, we need to look at other aspects of your overall loan portfolio such as debts, income, etc.

Consider this: To get started on a FREE pre-approval for a home loan, including an analysis of all the important details going into a home loan, please apply online or contact me to apply over the phone.

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I have access to a substantial amount of money

Recommendation: Assuming the home will appreciate (or at least hold it's value), the taxes will not skyrocket and you plan to be in the home a while, buying would be a great option for you.

Here's why:  Homeownership is a great idea for you because you can invest your money in an investment that typically does very well.  Prices are low, rates are still low and it is a great time for first time home buyers to get into the market.

Consider this: To get started on a FREE pre-approval for a home loan, including an analysis of all the important details going into a home loan, please apply online or contact me to apply over the phone.

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