RENTING A HOME VERSES BUYING
With home values continuing to drop in many areas of the country, it could be beneficial for you to rent as opposed to buying at this time. One formula for testing the market in an area you would like to purchase is called the rule of 15.
Research the average rent for the area by going to Zillow.com or Trulia.com and calculate the amount you would spend on rent for a year. Example: Rent at $2500 per month times twelve equal $30,000 per year.
Multiply $30,000 by 15 and you have a total of $450,000.
If comparable homes, similar to the one you will be renting, are selling for more than $450,000 it is an indication that the values have not declined in that area. It would be wise to rent for a while instead of buying while keeping an eye on the market.
If renting is not an option for you and you plan to stay in the home you purchase for 10 to 30 years, then go ahead and buy. Make sure you are well informed on the market before signing a contract.
Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622
dwing@academynational.net
Research the average rent for the area by going to Zillow.com or Trulia.com and calculate the amount you would spend on rent for a year. Example: Rent at $2500 per month times twelve equal $30,000 per year.
Multiply $30,000 by 15 and you have a total of $450,000.
If comparable homes, similar to the one you will be renting, are selling for more than $450,000 it is an indication that the values have not declined in that area. It would be wise to rent for a while instead of buying while keeping an eye on the market.
If renting is not an option for you and you plan to stay in the home you purchase for 10 to 30 years, then go ahead and buy. Make sure you are well informed on the market before signing a contract.
Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622
dwing@academynational.net
posted by Academy National Mortgage at 10:03 AM
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