If you are currently renting, maybe you shouldn't be. Everyone buys real estate. You can either buy it and own it for yourself, or if you are renting, you are buying it for someone else.
Consider this: if you are paying (for example) $1,200/mo in rent for your 2br, 2ba apartment or townhouse you can probably own a nice place for the same money. And it's yours!
That $1,200/mo rent probably equates to the same payment you would have on a $175,000 home! Interest rates are at all time lows. Today I see you can get a mortgage for around 4.5%. Of course this depends on your credit, but for the sake of argument, let's assume credit is good.
Here's how the numbers breakdown:
- A $175,000 home at 4.5% means that your payment to the bank for principal and interest would be about $897/mo.
- You have to pay property taxes (which you don't when you rent). Assume they are $2,000/yr. $2,000/12 = $167/mo.
- You have to pay home owners insurance to cover the home in case of fire, etc. That's probably around $44/mo. You are probably paying some of this now for your renters insurance.
- You have to pay mortgage insurance to the bank if you get an FHA loan (everyone gets FHA loans today because you only have to put 3.5% down). That's about $74/mo.
So, total monthly payment to own is $1,182!
When you are ready to move, you'll get money back (you won't renting!).
Just food for thought... why rent?
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