Renting vs Buying -- Understanding the difference........ FHA? -- Part 1 of 3

throwing money out the window

Will a FHA loan help you?  It's very possible and we'll talk more about that later. Are you throwing money out the window by renting? More than likely, yes. But this can be a complicated decision based on several different factors. Sure, you can try the many rent vs buy calculators online, but I have found so many not to be the same as the first one. Talk to a mortgage professional.

 

When should you not buy a home?

  • If your rent is very low. (usually 2/3 or less of your monthly payment)
  • You intend to move in a few years. (unless you get into the house with no money out of pocket)


Is this statement, "throwing your money away on rent", a myth? It certainly can be and here is why. When you buy a home, you still have expenses unlike renting.

  • maintenance
  • original closing costs when buying the home
  • monthly property taxes
  • yearly homeowners insurance
  • sometimes mortgage insurance [but there are many types of PMI loans (Private Mortgage Insurance)]


houseOkay, are you confused, since I have mentioned some negative reasons why not to buy a house. It's because the positive reasons will outweigh the negative reasons of buying a home. Key word being usually. Your home can become your own personal bank.

Positive reasons for buying a home 

  • You can write off the interest yearly
  • You can deduct the points that you paid when purchasing, the 1st year
  • Your home will appreciate, becoming more valuable over time ******
  • Pride :  The home is yours. You can basically do what you want, within reason.
  • Once your home is paid off, you just have yearly taxes and homeowners

 

 

In Part 2 : I will talk about comparing renting vs buying in dollar figures. And I will also introduce a few different types of programs to help you in buying your dream home.

 

The First Time Homebuyer Series :

 


Buying Tips :
 
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19 Comments on Renting vs Buying -- Understanding the difference........ FHA? -- Part 1 of 3

I look forward to Part 2. I agree with Part 1. Now I am running into the interest rate is creaping up and the monthly payment is getting higher than staying and renting.

06/18/2007 09:45 PM by Susan Trombley Re/Max Broker Raleigh NC & Surrounding Areas (Re/Max Hometown)

Hi Jeff,

Another Goldie for the Bookmark Library.  Good job!  This is the sort of stuff the public needs.  Thanks for sharing Jeff.

 

06/18/2007 09:50 PM by Pascack Valley Real Estate>> Lisa and Robert Hammerstein (Coldwell Banker)

Susan....  sure, rates are creeping up. But in any case, the numbers are for you when buying a home. Most positives will still out way the negatives, even rates creeping up. What about when people bought homes with 11% to 18% interest rates?  Thanks for stopping by.

Lisa......  yes, the public does need to read more of these. Thanks for the polite compliments. 

06/18/2007 09:57 PM by Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages (Infinity Home Mortgage Company, Inc)

Jeff - our brains must be working on close channels.  During my weekend visit to Desert Aire that I just posted, I found myself catching up on some loose paperwork in the sun.  One of those things is a report I am writing to offer to renters....just like your great post here!

p.s. MEME coming soon.....

:)

06/18/2007 11:30 PM by HOPE Lending LLC

Jeff~

Thanks for this post. I have bookmarked it and appreciate your sharing this information.

06/18/2007 11:38 PM by Asheville's GREEN Land & Homes ECO-Steward Realty

Melissa...... so, what is my brain thinking now?  ;o)   Seriously though, I would love to see this report that you are working on. Thanks for the very polite compliment.

janeAnne.....  my pleasure and thanks for your lovely comments as usual. ..... 

06/19/2007 12:18 AM by Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages (Infinity Home Mortgage Company, Inc)

Jeff - lol :)  You're thinking about ice cream.  Well if you weren't, you are now. ha ha ha  By the way, I sent you an email asking about posting the MeMe.  Did you see it?  This was my question:  So do you mean when I post my blog, to reference your "knock knock"?  You don't want me to post it inside your block as a comment, do you?

 

06/19/2007 12:25 AM by HOPE Lending LLC

Jeff, you put together a nice post, here.  Easy to read.  It has a star in my heart.  Is that good enough?

06/19/2007 05:46 AM by Chris Elizabeth Griffith ~ Bonita Springs Fl Real Estate (Keller Williams Elite Realty, Bonita Springs, FL)

Jeff, thanks for the easy to understand and straight to the point posts you always do. I'm sure both professionals and everyone else gains a lot of knowledge from them. Keep them coming! :}

06/19/2007 06:28 AM by Tonisha Mitchell (Dollar Mortgage and Financial)

Excellent post Jeff!  This is something that agents should use as a hand out to customers.

06/19/2007 06:30 AM by Monika McGillicuddy~ N.H. Real Estate Broker & Trainer (Prudential Verani Realty/Hampstead)

Melissa...... I actually was Sunday night, so we are a day off on that one. But hey, not bad.  You should have received my e-mail in regards to your meme. Looking forward to it.

Chris..... any star from your heart is good enough. Thanks for the warm compliments and for stopping by.

Tonisha....  I do hope a lot of people gain some insight to buying a home from these posts. I love educating the consumer. It can sometimes make my job easier. Thanks for the kind words.

Monika.....  any agent can copy these and hand them out. I would be honored if they did that. Thanks for the polite compliment.

06/19/2007 09:13 AM by Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages (Infinity Home Mortgage Company, Inc)

Great Post as usual

06/19/2007 09:16 PM by Rebecca Savitski NC Real Estate Listings (NC List for Less Realty Incorporated)

Rebecca,,,,,  thanks a lot, I truly appreciate that.

06/19/2007 11:55 PM by Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages (Infinity Home Mortgage Company, Inc)

Great segment! You really identify all of the pros and cons. It's always refreshing to see both sides of the coin!

06/20/2007 06:10 PM by FHA Book

FHA book....  ???  I wish I knew who you were.  In any case, thanks for that wonderful compliment and the comments.

06/21/2007 11:15 AM by Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages (Infinity Home Mortgage Company, Inc)

post looks great. Keep up the good work.

06/21/2007 01:47 PM by SHAUN WREN (WRENMB)

Thank you very much for sharing, this is great information!

07/25/2007 12:15 AM by Shane Sarae, Senior Mortgage Planner (Loan Network LLC)

Shaun....   thanks a lot, I enjoyed this series. And thanks for the compliment.

Shane.....  my pleasure and thanks for stopping by.

07/25/2007 02:25 AM by Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages (Infinity Home Mortgage Company, Inc)

Jeff -- I am adding this post to the links that I send to my rental clients and leads.

04/21/2008 01:50 PM by Rich Schiffer, REALTOR, e-PRO (Weichert, Realtors)

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Loan Officer: Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages (Infinity Home Mortgage Company, Inc)
Jeff Belonger -- The FHA Expert.com -- New Jersey mortgage -- FHA mortgages
Cherry Hill, NJ
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