What's YOUR Personal Breakeven Point?
Renting VS Buying
Do a Google Search. Type in "home buying fears". See all the pages of articles that pop-up addressing the topic and the many reasons you should or should not be fearful ...
Home evaluation is often mentioned within the context of both pro and con arguments found. Rightfully so. Both present and future home value trends are vitally important.
Those thinking of buying a home now or soon need to educate themselves fully on 2 things in particular, though ...
- The speed in which home values have risen (historically and recently) in the area in which they hope to buy
- Projections for those home values in the future
For those trying to decide which serves their interests better (Buy VS Rent), finding the "breakeven point" (often referred to as the "tipping point") of a purchase is instrumental to making a sound financial decision.
What is the "breakeven point"? The "breakeven point" is that point (typically stated in years) at which the cost of buying a home becomes less costly than renting that same property.
What's taken into consideration and compared when calculating the "breakeven point"? Included are:
- Down payment/other upfront payments
- Monthly rental payments
- Mortgage payments
- Insurance (Homeowners vs Rental)
- Maintenance costs
- Closing Costs of a Mortgage
- HOA Fees
- Possible Miscellaneous Costs
For those in the Chicagoland/IL area and facing some home buying trepidation, recent reports provide encouraging news regarding the area's "breakeven point". It's trending downward and is currently being reported at 2.1 years.
This trend is also playing out in the majority of metro markets across the U.S. 72 out of the 100 largest markets show a home purchase becoming financially beneficial after less than2 years.
Now there are always personal elements that must be taken into consideration during this decision-making process too.
Employment, relocation, changes within a family, plans for length of stay within an area/home ... are some of the most important.
But it's also important to remember: A Buy VS Rent decision is very personal to you, your family. The financial facts and individual elements feeding into your final decision belong to you and you alone.
The very same can be said for your mortgage financing, should you decide to pursue home buying. Every step .. every decision ... every option ... is totally based and reliant on you and your personal scenario.
Please don't fall into the trap of comparing yourself to anyone else ... or their decisions and outcomes. Ask questions, gain answers, compare facts as they pertain to you.
Do your homework. Educate yourself. Talk to local professionals, agent, and mortgage, for the info you need.
That and that alone will reveal the decision best for YOU regarding Renting VS Buying and your personal breakeven point ...
* Hoping to Buy or Refinance a home in Chicago or elsewhere in the Chicagoland area? Contact me! I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I can be easily found at: