Don’t Get Caught in the Rental Trap!

    There are many benefits to homeownership. One of the top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

    Don’t Become Trapped

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    Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns that,

    “Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

    In the Joint Center for Housing Studies at Harvard University’s 2015 Report on Rental Housing, they reported that 49% of rental households are cost-burdened, meaning they spend more than 30% of their income on housing. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

    It’s Cheaper to Buy Than Rent

    In Smoke’s article, he went on to say,

    “Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”

     “While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

    Know Your Options

    Perhaps you have already saved enough to buy your first home. HousingWire reportedthat analysts at Nomura believe:

    “It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

     It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

    Many first-time homebuyers who believe that they need a large down payment may beholding themselves back from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

    Bottom Line

    Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

     

    Source:  Keeping Current Matters

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    Steve Baker

    Steve comes to the world of real estate with nearly 30 years of Marketing and Graphic Design experience. These two very important skills make him ideal for this profession. In 2017 he achieved his highest accolade to date becoming a global, award-winning real estate graphic design/marketing recipient. Mr. Baker is not only a REALTOR but the Director of Marketing for Rinehart Realty. His education and work experience also include a Bachelor degree in Education and degrees in Radiologic Technology and Medical Ultrasonography. He was a pioneer in the field of Radiology PACS development and Radiology Voice Recognition adoption and implementation in southwest Virginia. His previous positions as Director of Radiology and PACS Administrator lead to enormous development in resources and project management necessary to succeed in the field of real estate. Steve is a writer and developer for a variety of blogs and real estate publications. He recently completed his first book of quotations and is currently working on a Real Estate Marketing book. He is a strong supporter of the United Way, having won a past Campaign Coordinator of the Year award. He is also a strong advocate for breast cancer research and education. Mr. Baker has a history of work experience developed on the foundation of a strong work ethic, the pursuit of excellence, quality, honesty and integrity.

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