As interest rates are on the rise, it’s a perfect time to compare renting vs owning. With some great options for down payment assistance, first time home buyers shouldn’t miss out on this opportunity.
Down payment assistance programs up to $10,000 are available to qualified applicants allowing home buyers to get into homes with very little cash out of pocket and in some instances less than $2,000.
Your payment will vary depending on how much you will be borrowing, the interest rate, and the length of your loan. Other factors also need to be taken into consideration, such as your taxes, your insurance, all of which are included in your monthly house payment.
Rent vs Own Example
Just as an example, let’s say you want to buy a house today for $149,900 and need to borrow $144,600 for 30 years with an interest rate of 4.125% which would have and Annual Percentage Rate or APR of 5.289%. Your property taxes may be $1,500 a year and insurance about $600 a year. You can expect to be making a total payment of $989.71. ($713.07 toward the actual loan, plus $150.00 for real estate taxes and $50 toward insurance.) If there is an association fee, this would be added to your monthly cost. Let’s just say $200 for an estimate of $1,200 a month.
At $1,200 a month, you could have a house for what you pay in rent today! Don’t let a lack of down payment prevent you from purchasing a home. With the down payment assistance programs potentially available to many home buyers owning a home today with very little cash on hand is truly an option.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it’s applicability to your financial situation. Please consult your financial and/or tax advisor.