In a recent findings, eighteen percent of respondents couldn’t pay the full rent due in at least one of the past three months, according to the poll of 40,000 published by Apartment List. A large part of this could be due to the rising rent costs we are seeing in major cities. With rent rising at a rapid rates, is homeownership something to consider?
Your Payment Stays the Same
1) Having a fixed rate mortgage means your payment for principal and interest stays the same. In other words, you won’t get a yearly surprise asking the question, “How much is my rent going up this year.?” How about we put that into real numbers. Let’s say you pay $1000 per month for rent. Over 5 years your rent goes up 5% each year. Starting your 6th year of renting you would be paying $1276 per month. That is an extra $3300 per year! Not so with a mortgage, your payment would remain at $1000.
Your Payment May be Lower
2) Many times a mortgage payment could be less or equal to what you are paying for rent today. As rent continues to increase, a mortgage payment becomes more and more likely to be less than rent. So what would a home payment be? Go to mortgageexplorers.com and click on the mortgage calculator. You can put in some numbers that fit your circumstance. As a starting point put in a loan amount of $100,000 and see where your payment would fall. From there you could go up or down depending our your circumstances. Once you have a general idea of the range you fall in, you can reach out to a mortgage professional that can give you more specific information.
Now is a great time to stabilize your housing payments. Fill out our appointment request form or give us a call at (517) 618-1816 for your free consultation!