How much do you pay in rent?
Our table figures includes taxes, insurance, and PMI, on a 30 year fixed payment plan. If you download the mortgage calculator we've provided, you can adjust all these numbers to fit your situation. Of course, these are only estimates. Either of our two mortgage teams can give you accurate data to help you make an informed decision. Our top priority is to make sure you're getting the most information available that leads to the best decision for your needs.
*(All figures are calculated on certain assumptions and may not reflect actual amounts.)
How much is it costing you to rent?
The average rent for 1,300 square feet, three-bedroom apartment in Columbus, Ohio is just over $1,100 per month as of June of 2018*. In some neighborhoods the rent is over $2,000 per month. There is also an 5% increase in rents every year. That means your $1,100 apartment will be over $1,400 in five years and $2,000 apartment will be over $2,500. Renting gets more expensive the longer you stay.
High payments and rent increases are not the only downsides to renting, especially in apartments. You also have to contend with your neighbors. If they’re nice, good people, then all is well; but if they decide to move, it’s a lot like playing the lottery, sometimes you win but more often than not, you lose. Sometimes they’re noisy, playing their music too loud. Other times they noise is them screaming at each other, cussing and calling names (I have experience with this one…). Another problem is bugs. If one tenant brings in bed bugs or cockroaches they can spread to the entire building, (…and this one too).
Renting a house has its share of problems too. Like in an apartment, you’re just throwing money away. At $1,000 per month, you’re throwing away over $60,000 every five years. In ten years, you could own a house. Don’t get me wrong, there are concerns with owning as well. You have to do all the maintenance and upkeep on the house. If something goes out, like the sump pump for example, you don’t have to wait for your landlord to find the time to call a plumber to do it, you have to pay to fix it.
Every dime you put into the house is yours. Whether you pay for repairs, updates, or upgrades, it’s your money; but it’s money well spent because it’s your house. If you spend any money on fixing up your landlord’s house, you’ve lost the money. Fixing your house however, has the potential to bring you a higher payout when you decide to sell it. With the right investments and paying it off beforehand, selling your house could pay for your retirement.
What’s your buying power?
Did you know, depending on the type of loan, you can buy a home with as little as 3.5% down or even 0% if you’re a veteran? According to our chart, your monthly mortgage payment on a $150,000 house would be about the same as renting a three-bedroom apartment of similar size. If you could manage to make one extra payment every year, you could own it, free and clear, in half the time. Of course, the more money you’re able to put down the lower your payments will be.
Some people believe they can’t buy because of their credit score is too low or, they have a bad credit history with a foreclosure or bankruptcy. The facts, however, are different from what is commonly believed. The minimum credit score required to buy a new build home is only 620. A lower than ideal credit score isn’t a problem if you’re willing to do what’s necessary to fix it. That’s one of the great things about this country, with hard work and determination, you can accomplish anything – even homeownership.
With a bankruptcy in your history and depending on which one you filed, your wait time afterwards can be a little as one day. Foreclosure has the longest wait. The length of time depends on the type of new mortgage you’ll be getting. It can be between 3 to 5 years from the time the old property is out of your name.
The bottom line is, you may have more buying power than you think. We have two teams of lenders we work with, one for new builds and one for used homes. Both can help repair your credit and set you on the right path to homeownership. Contact us today. Even if you’re just thinking about buying a house, we can help you get on the right track before you ever apply for a loan.
*RentCafe.com: June 2018.