GETREALestate

JOIN THE TENANT REVOLT!!

Why rent when you can own! All indications are pointing to a turn in the market. Rents are hitting their highest in years and home prices hit bottom and by all indications begun to rise. Couple that, with a slight rise in interest rates, it is time for tenants to reconsider their position of continually paying their landlord’s mortgage, when it may be the perfect time to pay their own and receive the benefits of home-ownership. 

By using the simple calculations below it may be well worth
taking the plunge. 

Comparison Worksheet

(Please complete first part)

Monthly Rental Expenses:

Rental+Utilities+Parking=

Monthly Ownership Expenses*

$1,526 (P&I) + 1,000 (RETxs) + 250 (I&U) - 734 (appr inc tx svgs) = $2,042         

Monthly Rental - Monthly Ownership=

(*Based on a home price of $400,000, 80 percent LTV at a mortgage rate of 3.99 percent/apr 4.053 percent. The above quoted prices and costs are deemed for estimate purposes only. Rates and costs are subject to change and to qualified buyers)             

Working out the numbers, you can see that the cost of home-ownership includes income tax deductions not found in renting. Plus you now own a piece of the American Dream, with the ability to build equity and the option to sell at anytime or use the equity to invest elsewhere.

If your calculations show that your rent is greater or 10 percent lower than the monthly housing expense, it may be time to look at your housing options. It is best to start by speaking to a mortgage specialist who can discuss what your purchasing power is (many times a Realtor can suggest a reputable mortgage company). They will look at several factors such as down payment (which can be as low as 3.5 percent) and where it comes from, credit score, income, expenses and employment history. These factors will determine if and how much a buyer will qualify for. There are also times when the mortgage expert will have to give the prospect the bad news that they are unable to obtain a mortgage at that time based on the aforementioned determinants. However, the good mortgage experts will also give suggestions and many times assistance to that individual to fix what needs to be fixed to eventually get a mortgage in the future.

From there, the mortgage counselor will suggest the type of mortgage that best fits the individual as the choices range from: 15, 20 or 30 year fixed rate; adjustable or balloon rate mortgages; VA loans; and various types of government insured FHA and USDA mortgages (some with extra money for repair). It is best to talk to a live mortgage person than an Internet site to discuss your personal needs.

I am seeing that the tenant revolt has begun. The market is definitely picking up and homes are selling. We have seen some bidding wars, or at least homes on the market for less days than we did last year. However, and not to put a crimp in the good news, it is still lagging in some areas whereas, communities such as those in Bergen County, are seeing upswing. Also, we will not see the same frenetic sales pace as we did between 2004-2007 for awhile, but we are close to being back to a normal market in which we will soon see a 2-4 percent increase per year.

So you would be buyers need to get off that fence and start the process to homeownership. Get the help from a Realtor and a mortgage specialist as they are the experts in the field.  

When considering a Realtor, contact the experts at Better Homes and Gardens Rand Realty at 201.945.7484 or www.jeffrey.halpern@randrealty.com or stop by their offices at 742 Bergen Blvd, Ridgefield

Happy house hunting!