RENTING VERSUS BUYING
I often get this question asked a lot. Do I continue to pay rent or should I actually purchase a home? In the South Floida area we have a low inventory of rentals available which has created a dramatic increase in the rents over the past couple of years. Even large rental apartment communities are pretty full and will put you on their wait list.
Last year a client of mine called me. She had relocated to the Jupiter Florida area from Boston about 3 years ago and at that time I had found her a rental. She wanted to explore her new town and decide if the Florida lifestyle agreed with her. She is fast approaching retirement age and has never owned a home before. She has rented her entire life. At work she witnessed many of her younger co-workers purchasing new homes. She kept seeing this trend happen over and over again. Then one day her Landlord called her and stated her rent was going to increase again. She thought long and hard trying to understand why everyone was purchasing instead of renting. She worried her rent would keep escalating over time.
The next week she picked up the phone and called me. She described how her landlord already notified her of a rent increase again and that was a big concern for her. I told her that it is a great time to purchase. Mortgage interest rates are still relatively low and that I should be able to help her find the perfect home and also keep her monthly payment below what she is actually paying in rent.
The next step was to get pre-approved for a mortgage. A good mortgage professional can inform any buyer what they can qualify to purchase a property. You need this information before starting to look at any properties. Any experienced Realtor will not show you any properties without it. It is also very important to have this loan approval ready when submitting an offer on a property. The mortgage lender will be able to answer all of your questions in regards to what your monthly mortgage payment will be. What is included in the payment? Are your real estate taxes & insurance included in your payment? What are the current interest rates are? How much of a down payment do I did? Is it better for you to choose a fixed or adjustable rate mortgage? Should you do a 30 year mortgage versus a 15 year? Are there any homeowner association or condos dues? Getting all of these questions answered before your search starts is definitely a step in the right direction.
Within 1 day my buyer got pre-approved for her mortgage, now the house hunting search begins. We looked at about 10 properties and my buyer loved the 2nd one we looked at. We made arrangements to go back to that property for a second look and the buyer then decided this home was the "one". After submitting a solid offer along with the mortgage pre-approval letter, the seller accepted our offer.
Now on to the home inspection. This inspection was scheduled for the following week and no major issues were found. Within 45 days from start to the finish, my buyer found her new home and we were able to achieve a smooth closing and then soon after the movers arrived. Not only does she have a lower monthly payment then her previous rental but she is now building equity in her new home. Real Estate values in the South Florida market have increased dramatically over the past 2 years and we see this trend to continue. This was a win win situation all around. It is never to late to purchase your own home.
Feel free to call me if I can be of any assistance to you in your real estate home search