Is it Cheaper to Buy or to Rent?

Verani Realty

Blocks saying buy or rentOnce upon a time it was actually cheaper to rent an apartment or condo than it was to buy a home, but that is not always the case anymore. It all depends on your location, but there are some areas where the monthly mortgage payment for an average-priced home is less money than the average monthly rent on a three-bedroom property.

The price of rent has gone up substantially over the years, while the cost of buying went down, partially after the market plummeted in 2008. While home prices came down and were more affordable, construction also went down, meaning fewer new apartments to meet demand, which was already high before the recession.

The result? Rent payments can be just as much or even surpass mortgage payments for a similarly sized home. According to a recent report from New Hampshire Housing, the median monthly rent for a two-bedroom apart is at over $1,200.

In fact, recent economic studies across the US found that due to the sharp rise in rental prices, buying now makes more sense in about two-thirds of the nation's counties. This is in part because of the historically low interest rates borrowers have been taking advantage of for the last few years. Though rates have slowly inched up in recent months, they are still at historic lows, making it an excellent time to buy.

Does this mean you should consider home ownership? The best way to find out if owning a home might be cheaper than your monthly rent is to speak to a mortgage lender and see just how your finances fit into their loan requirements and products.

Will You Qualify?

You won’t know if you don’t ask. Often, buyers think they will not qualify, or that owning is far more costly than renting, but sometimes they learn that they actually could spend the same or less per month if they bought a home – and that they do qualify for a mortgage.

What about that big down payment you haven’t saved for? Do not worry about whether you have a sizable down payment to place on a home. There are programs to accommodate buyers that lack the 20 percent down payment you hear so much about.

According to a recent survey, 70 percent of potential home buyers do not know about down payment assistance programs available to them. Though Fannie Mae and Freddie Mac are offering a much-publicized deal of only 3% down payment required for a mortgage (versus their previous 5 percent), you might be surprised that there are even better deals out there. In fact, there are more than 2,000 down payment assistance programs nationwide that can drastically reduce the amount of money buyers need to pay at closing.

Owning a home can come with its challenges, but it is an investment and can cost the same or less than a monthly rent payment in some cases. Now is the perfect time to learn more about buying, and considering putting that rent money into home ownership instead. The first step is to talk to your mortgage broker, who will be able to find out how much home you qualify for and if it fits your budget.

To learn more about getting pre-approved for a mortgage read our article on how to get a mortgage.

Previous PostNext Post




MLS Property Information Network. Inc. The Total Listing Service
Neren MLS New England Real Estate Network
Maine IDX
Equal Housing Opportunity

©2020 MLS Property Information Network, Inc; The information in this listing was gathered from third party resources including the seller and public records. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations or warranties as to the accuracy of this information. 
Copyright 2020 New England Real Estate Network, Inc. All rights reserved. This information is deemed reliable, but not guaranteed. The data relating to real estate displayed on this Site comes in part from the IDX Program of NEREN. The information being provided is for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data last updated May 24, 2020. 
Maine Real Estate Information System, Inc. All Rights Reserved. Listing data is derived in whole or in part from the Maine IDX and is for consumers' personal, non-commercial use only. Dimensions are approximate and not guaranteed. All data should be independently verified.

© 2020 BHH Affiliates, LLC. An independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of Columbia Insurance Company, a Berkshire Hathaway affiliate. Equal Housing Opportunity. View our Privacy Policy

Website Powered by Real Estate Web Solutions

©2020 Real Estate Web Solutions, LLC. All rights reserved. realOMS Login | Switch Mobile Site