Should I rent or buy?
Rent or Buy ?
There is a severe shortage of rentals available in our area. Due to increased demand rental rates have risen. And as those rental rates go up, the difference in cost between owning a home and renting a home lessens.
When you rent your home, you have a stack of cancelled checks at the end of the year. But when you own the home, you have hopefully built up equity. Your mortgage interest and your real estate taxes are tax deductible which will save you even more. But will the monthly payments cost you more if you rent or if you purchase a home?
Here’s an Example
Let’s look at an example. An average condo in Freehold Township will rent for approximately $2,000 per month. The average condo in the same town sells for about $234,000.
If you were to buy this average condo, you would need a 20% down payment of $46,800. The mortgage amount of $187,200 will cost, at today’s interest rate, $921. You would also have the Homeowners Association Fee of $250 – $300 per month. The property taxes will be $500 – $600 per month. A few complexes are FHA approved so you would have a lower down payment but pay more in the mortgage payments.
One way or another, you will be paying the mortgage. It’s up to you to decide if you want to pay your mortgage or your landlord’s mortgage
When you’re ready to become a home owner instead of a tenant, contact us.
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