If you think you can afford a $1,500 per month mortgage but your rent is $1,100 and you haven’t been able to save, you may need to rethink your plan. If you have your heart set on buying, you should take a long, hard look at your income to see if it’s stable and rising. Then, look at your assets to make sure you have enough for a down payment plus enough leftover for an emergency fund.
If you are confused about what would be financially better for you to rent or buy, use an online Rent vs. Buy Calculator to estimate the difference in payments and see what you can afford.
One clever idea is to save the difference between your rent and your estimated mortgage for a year or longer to get used to paying the larger amount. This way you will also generate additional savings for a down payment.
Advantages of Renting
• Maintenance costs are built into monthly rental payments, and the landlord will repair or replace anything that breaks.
• Homeowners not only need money to make repairs; they must also make time to maintain their property. Even a relatively small and new home requires maintenance, and an older home takes a bigger commitment to keep up.
• Renting keeps you mobile – you can move whenever you want to take a job in another part of the country or find a new neighborhood/part of town ‘just because.’
Advantages of Buying
• When you purchase a home, you can invest in a community and build long-term friendships there. Many people buy a home when they’re ready for their children to start school for this reason.
• Homeowners can make their own decisions about how to decorate or improve their property without having to seek the approval of a landlord.
• Financial planners say buying a home is a terrific way to build wealth over the long term. You build equity as you pay down your loan plus you get the benefit of the tax deduction.
Los Angeles Mortgage Broker
Buying a home for the first time is both exciting and stressful. Peak Finance Company simplifies the experience by offering a range of specialized products for first-time home buyers. Peak Finance Company provides you with personalized service in a timely and courteous manner. Contact Us today for more information or to set an appointment.