Buy a home for less than rent

Buying a Home for less per Month than your Rent by the Numbers

This statement always raises an eyebrow…or 10, when I say in this market, with just a moderate down payment, you can buy a home for less than what you pay in rent.
 

Buy a home for less than rent

This is how it comes out by the numbers:

Let’s take a $175,000 house in this market, assuming a 5% down payment.

Principal and Interest  @4.25 817.88
Taxes @1.25% 182.29
Insurance  100.00
Mortgage Insurance    81.74
Total     $1,181.88

 

Lets compare that to a reasonable rent payment in this market of $1,250. This is how we come to prove the statement that you can buy a home for less than your rent.

Even further, after the tax benefits of mortgage interest, and the doors which this immensely valuable deduction opens, the net effect means an amazing savings to the home buyer over renting.

For more information, check out HomesteadU

Low Mortgage Rates

Mortgage rates dropped all of April, what happened?

Ever since the November presidential election, we heard all of the catchy phrases which meant mortgage rates are going up… “Trump Bump”, “Trump Trade”.   The benchmark, 10 year US Treasury yield has moved from 1.78% pre-election to as high as 2.60% in less than 4 months.

Low Mortgage Rates

Then, April came… Now fears of the “Trump Trade Fade”, and the “Trump Bump Dump” have really just normalized the rate movement to more sane levels. Add some global uncertainty, and that’s how we have seen a great amount of downward movement in mortgage rates in April, and it’s happened without much notice.
 
Translation for the homeowner – With this recent drop in rates, how would refinancing benefit me?
– You have a rate in the 4’s with mortgage insurance on a 30 year or in the 3’s on a 15 year.
– You have any other consumer debt where consolidation makes sense.
 – You may have seen your credit card rates and other lines of credit increase recently due to rate increases by the Federal Reserve which act independently from mortgage rates.
Again, as always, if you ever want to find out if a refinance makes sense for you — that conversation is always FREE!