Thinking of renting an apartment at least consider this why are you making the rich richer when you should be building your wealth?
There are many reasons why people rent an apartment. The biggest one is most likely your ability to leave once your time is up with no strings attached. I get that. Not everyone is going to feel comfortable buying and I get that too. My hope is to at least give you something to think about and hopefully have you think differently about buying instead of renting. This decision could help start your journey to single family homeownership and improving your financial future.
Why you should at least think about owning.
You believe renting an apartment is easier than buying a home. Did you know the process is pretty much the same? I guess you could find a place to rent in less than 30 days if you had too. If you have all your information ready you could buy too. Both the rental and the loan company will run your credit score. In most cases if your credit score is 640 or better you most likely will qualify to rent or buy. Both are going to evaluate your debt to income ratio and if it is good you will most likely qualify for the rental and a home loan. Changes are coming in July to Fannie Mae guidelines in reference to acceptable debt to income ratio, check out my blog page for information. You will most likely need a security deposit and first month’s rent which could be the same amount or close to what you need for closing costs. Just like there are deals for little or no security deposit to rent a place, there are low to no down payment options for loans as well. You will need to shop for an apartment to rent so why not shop for a condo to buy. Whether you rent or buy the place, this is not your long term places anyway. But consider this with rent you are paying someone else, with a mortgage for the same price you are at least building your net worth and improving your credit score. Have you ever asked how the rental property how they will impact your credit score? Your credit score is just as important as your down payment when you are ready to buy your dream home, especially if you are renting from another person, odds are they are not reporting your on time payments.
You need to save money to buy that dream home someday. You can do both. Own and save money. So you decided to save money to make your home purchase. No doubt this is a good idea. Even with low and no down payment options you still might not be able to afford the home you want right now, that’s why you are renting. Before renting, consider this. If the rent you are paying for an apartment is the same as the condo mortgage payment you can still save for that dream home. The money you were planning to set aside for your down payment can be used to pay down your principle. By paying down your principle each month you can increase the amount of money you could receive when you sell, if you factor in a good year or two of increased property values you could be moving sooner than you think. What happens if live happens during this time and you need money to pay for something? If you rented a place you could use your down payment saving and extend your lease to save the money you used or you could always take out your equity line and stay a little longer before selling. The good news is you can could consider selling any time once the math works out, no need to wait until the lease ends. Either way one property is still working for you while the other one is just working.
Why not find out whether or not you could be an owner verse a renter. If you are calling a number of rental places why not place one or two more calls to see if this is even possibility. If you are a veteran you can use a VA loan. Do worry most people do not realize they can use their VA loan entitlement more than once. Why wait to start your financial future.