The Rental Trap
Be Careful Not to Get Caught in the Rental Trap!
There are many benefits to homeownership. One of the great financial advantages is being able to protect yourself from rising rents by locking in your housing cost for the life of your mortgage.
Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns that,
“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”
The Joint Center for Housing Studies at Harvard University’s 2016 State of the Nation’s Housing Report, revealed that, “The number of cost-burdened households rose to 21.3 million. Even more troubling, the number with severe burdens (paying more than 50% of income for housing) jumped to a record 11.4 million.”
Know Your Options –
It May Be Cheaper to Buy Than Rent!
Perhaps you have already saved enough to buy your first home. HousingWire reported that analysts at Nomura believe:
“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment. It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.”
Many first-time homebuyers who believe they need a large down payment may be holding themselves back from their dream home. Many qualified buyers think they need a 20% down payment. In reality, there are many loans written with a down payment of 3% or less.
Many renters may be able to enter the housing market sooner than they ever imagined – new loan programs allow for less cash out of pocket.
Real Estate Bottom Line
Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Let’s get together to determine if you can qualify for a mortgage now!