Avoiding the Rental Trap
Are you considering buying, but are wary of the market fluctuations, or are you a first-time buyer who is unsure of your investment future by buying in 2023 versus 2024? One of the biggest misconceptions and biggest miscommunications in market updates and real estate news is regarding renting vs home owning. Even with mortgage rates increasing if you're going to be living in one area for a minimum of 4-5 years; it is almost always better to own a home versus getting stuck renting. Let's explain why it is always better to own a home rather than rent.
Rising Rents
Over the past three decades, rents have consistently risen. Where rents are rising and continue to rise, it becomes harder to save for the recommended for a down payment to purchase a home. In the last year alone, rents rose 11.3% . While increasing mortgage rates mean that you are paying more than you would have been several years ago, rents are expected in increase even faster than home prices as more would be buyers create a higher demand in the rental market.
You're buying a home even if you rent
When you pay rent, you're paying for a home, it's simply not yours; it belongs to the landlord. While some landlords are extremely responsive and take excellent care of their properties, sadly many are not. Landlords are focused on profitability and when demand is strong they have very little motivation to make repairs or upgrades or to maintain your lease rate when it's time for you to renew.
Review before you Renew
Do not be tempted to renew a lease, if you think you might have enough saved to buy. In a future blog later this month we will discuss a variety of financing options. In the meantime, contact a member of My NC Homes if you are looking in the Research Triangle area and we can walk you through financing options and potential programs for a first-time home buyer. If you are trying to save for a down payment, see if there are ways to renegotiate interest rates on cards, consolidate debts, and other methods of increasing your odds of approval, and also help you set aside cash for a down payment and closing costs.
Buying in 2023
Most experts agree that more houses will come on the market in 2023, yielding more inventory, and giving a buyer more options along with the ability to negotiate. However, home buying will not be easy. 2023 buyers will need to be preapproved and we suspect lenders qualifications to obtain obtain a loan will tighten. In addition to higher interest rates to combat inflation, banks will be more selective in their lending. Start saving, monitor your credit, and consider other ways to supplement financing. Borrowing from relatives, seller financing, conventional 5-1 ARMS programs, and first time buyer programs are all ways you can work around fluctuations in mortgage rates. Stay tuned we have a blog on creative ways to finance coming up this month!
If you are renting this year and are not sure whether you are in a position to buy or whether there is a property that is suitable, do not delay. Rents are expected to rise and we are looking at more favorable conditions for buyers, especially first-time home buyers. We have over 50 years of experience in helping buyers secure financing and get into a home, and out of a rental trap. Contact My NC Homes today!
Posted by Larry Tollen on
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