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Bidding Wars For Rentals

Mortgage and Lending with Fairway Independent Mortgage Inc. NMLS #196099

I was looking over the news headlines online when I found a story about multiple applications with bids going as high as $5,000 over list price.


Rental listings in the Multiple Listing Service (MLS) are including screening comments such as, "Credit score must be 740 or higher," and "Applicants must have income 5X the monthly rent," which means that to get a modest $3,500 per month rental house, the tenant must have montly gross income of $17,500, adding up to $210,000 per year, and $3,500 per month rent doesn't get a palace, more like a cottage.


Moreover, some landlords are requiring the first and last month's payment, and a security payment of 2X monthly rent.


A $3,500 mortgage payment would get you a lovely, spacious, new or newly renovated priced at $621,340, with monthly escrows of $880 for taxes and insurance. A home, with a 3% (3.39% APR) down payment of $18,640. Just $4,640 more down payment, compared to the $14,000 you would owe to get a rental. You could pay a little higher interest rate and get a lender credit of 2.5% to cover your closing costs; that would be a typical loan rate of 3.25% (3.36% APR).


If the market follows the predictions of experts who say that the market will increase 4% per year in value, your home would be worth $725,710.


Plus, your loan would ammortize at an average rate of $1,250 per month, paying your loan balance down over four years by $60,000 Add the net gain in value over four years of and you would have $104,310 in equity, compared to geeting your cheezy $14,000 deposit. 


As of May 24, 2021 the market for homes for sale has eased up in the $600,000 - $800,000 range. There are more houses for sale in that price bracket than for rent.


To get more detailed information about your situation, contact the Queen of Mortgages, Markita Woods at the contact information below. You may find owning more affordable than renting. Plus, you'll get more house for your money. You'll have access to 20% down, 10% down, 5% down, 3.5% FHA down, or 3% down conventional loans.


Don't wait, call Markita now at the contact number below.