Renting to buying – Weekend Q&A
There were a few questions that rolled in this weekend’s Q&A section. Most of them have to do with switching from renting to buying. That is, how some details of the issue should be handled and what financing options exist. All these questions represent some of the major concerns of people looking to go from renting to buying.
Going from renting to buying is not an easy process. Actually, for many people, it can be quite daunting. However, you should be not dissuaded from moving forward because of a few glitches. Simply work at your own pace, try to find ways of crossing the hurdles and you’ll be in your new home in no time! Here are some of the questions that you posed.
What do I need to factor in when computing my monthly rent vs. my potential mortgage?
If you’re asking this question, you’re probably not sure if it’s prudent to switch from renting to buying. The most important thing here is to see whether the move pays off in the long run. Even though many online sources will claim that there are more advantages of renting compared to buying, there are also many that claim quite the opposite – that buying, in fact, is the way to go.
That is why it is necessary to get a one-on-one consultation. Having someone with an unbiased insight into the matter can be highly enlightening. This is particularly important if you’re trying to buy your first home. An impartial approach on what to do in your specific situation is crucial. Also, there are many specific needs that need to be met in your case when it comes to switching from renting to buying. That is why it cannot be done in any other way except looking at an individual situation.
Caption: It’s always best to get a one-on-one consultation
Compare renting to buying thoroughly
As it is, the issue of whether to switch from renting to buying includes calculating whether it is more affordable to buy in the long run. But, again, that depends on the personal situation. Some rents include heat and water, which is something that you will have to pay once you buy. In addition, on top of the mortgage payments and the interest rate, you will have to factor in real estate taxes, heat, gas, electric or water bills and everything that you spend on a monthly basis that doesn’t include food.
Make a list of everything that you pay per month, that is, your household expenses. This includes cable, heat water, gas, electricity and rent. Take your base net rent and add and compile from there. If you need further help, go to askimma.com or send a message through the Next Door app or social media. But, the main thing here is to make a list of everything that you spend a month that involves your home.
When you’re comparing renting to buying, don’t forget about the other costs that might occur during the moving process. If you put in effort and thought, however, you can definitely find an affordable and professional service. Go online and do research on the costs. If you need further help, go to jpurbanmoving.com and get informed about the value of an affordable trustworthy service. Then just add that to your equation.
What if I don’t qualify for a conventional type of loan? What type of mortgages can I get?
Actually, it doesn’t take much to qualify for loans. It is necessary to have good credit. That’s mainly because a lender does not want to deal with someone who has too much debt, as that can be a sign of unreliability.
However, nowadays some products are coming back to the market that require no income verification. They’re not quite the NINA loans from the past, but they are similar. Some lenders offer 65 loan-to-value (LTV) ratio, others allow it with a 30 percent down payment. If you have sufficient cash, even though you’re not sufficiently creditworthy, there are loans for you.
If you want to explore options, again, send a message and I can connect you with some efficient mortgage professionals. Or, we can discuss your mortgage people to see if they’re a good fit.
Caption: You can always talk to mortgage professionals
Don’t worry about conventional financing, there are out-of-the-box options, you just need to know where to go. You’re most likely to find that type of deals through a mortgage broker. They will find entities that are willing to take higher risks than the traditional banks. That’s where you have a good chance of getting a non-conventional loan.
I have 200,000 dollars saved, but my credit scores are not so good. I have no debt, but I have student loans. Can I buy a condo?
The best idea here is to keep your down payment in the 30 percent range, so as not to stretch all your consumer buying power. If you hit 30 percent down payment and have no other debt, no defaults, no foreclosure, no financial hardships, there’s not going to be a problem with the bank.
However, in general, student debt is viewed in a different way from regular debt, even when you’re renting. So, don’t worry if you have student debt. The important thing is to get a good agent that knows how to navigate around that.
In this case, the down payment is strong and the person who posed the question would be able to buy a condo. Once again, it is necessary to look at all the factors when considering a home purchase, that is, switching from renting to buying. Real estate is ever changing, so it’s important to see where you want to go and where you fit in.
For instance, should you decide to move to Manhattan from Brooklyn, take into account a variety of things. Yes, your down payment is strong, but the prices there are quite high. That is why you need to look at everything. The price of the condo, of course, and the height of the property tax, which is quite high in Manhattan, to name a few. And, always put everything to paper. Go online, do research before you consider everything, talk to a realtor. That is the only way to reach an informed decision.
Is it a good time to sell?
My most honest answer to that is – it is a good time to sell if that is the time you need to sell. Real estate is a cycle and it goes up and down. It is a living, moving and breathing market, and it fluctuates. Even though we are on a down market, that doesn’t mean it’s not a good time to sell.
Ask yourself why you need to sell. What is it that you need to accomplish by selling? If it’s just to test the market and see how high a number you can get, don’t do it. That would literally mean wasting people’s time. Professionals want to work with people who truly want to sell their property. However, if you’re actually considering the move, just deliberate on the situation and move forward gradually, at your own pace.
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