Interest rates: Pre-COVID-19, interest rates were historically low (I got 3.1%) in preparation for an economic disaster. Now, in the aftermath of COVID-19, interest rates have risen to 7%.
You can put that same money as a down payment into a high-yield savings account online. From there, you can make better money than you would save by borrowing the same money over 30 years.
The entire borrowing system is like a kidney repairing itself. It can fully function, but you can't push it to the limits anymore. It's now more expensive to borrow money, so it's not advisable to do so right now. Of course, people's lives don't stop while waiting for better interest rates, but it will be costly in the long run.
I don't know much about rent, but from what I understand, renters are the ones left holding the bill plus profit. Flexibility and less responsibility is worth it at times if you make the most of it.
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A lot of younger people are cohabitating to save money. Living at home with their parents, college dormitories and apartments, Roomies. com.
Unless banks are going to start writing loans and letting a half dozen different people put their names on one title or deed, it’s not that far fetched to consider homeownership is just too much for some people. It’s really not worth it as far as i’m concerned. I’ve always rented and i likely always will. People who suggest the cost of ownership is lower than renting. I don’t believe that for a second. They’re not factoring in the costs of maintenance and repairs. If ownership is so cheap and easy, why is it pulling teeth to get owners to make timely repairs on rental units? Because it’s not. Because home ownership is a lot like marriage. Everyone tells you it’s the best thing ever so that you join the club. Only to commiserate with you upon joining. Misery really does love company.
Ell oh ell!
Rent is often more expensive which makes it hard to save a deposit. I don't know what the situation is where you are but here homes that should be affordable to locally are snapped up by outsiders as second homes or to be used as holiday lets, effectively turning areas into ghost towns in the winter.
Most rent-to-own deals are sketchy as fuck, you could pay years into it and then be 1 day late 1 time, and get kicked out and all that time may as well have been renting anyway. It's safer to just rent a house unless you can afford to fully buy it upfront.
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Like was already stated, most banks require a substantial down payment. Then there are property taxes, insurance, and paying for upkeep, i. e. lawn mower, tools, routine maintenance and repairs, etc. But if you plan to stay in an area for a while, you will have the equity in the house and you will get that back.
I can't speak for everywhere, but in Washington the median home price is 602k, which is over 3k per month payment. The median rent in Washington is 2k. Medium income is 63k. After taxes that leaves about $4,300 workable income per month. In other words, either 1300 with mortgage, or 2300 with mortgage to cover everything else (phone bill, internet, car payment, insurances, food, gas/electric/waste, etc.)
So, yes numbers theoretically work to own a mortgage, but the market is still hot and many buyers have to forego inspections to compete with cash investors. Sellers also sell lemons of properties knowing they may need a roof replacement, deal with mold, septic issue, etc.
TL/DR - rent is not the same price as a mortgage (even after ignoring closing costs and potential damages that would need fixing within the first couple of years).
To buy a house they normally need 20% down, plus closing costs. To rent, they only need first and last months rent, plus a security deposit. Also, people that are already renting are usually stuck in a rental contract and would have to hope one they want to buy happens to be available when their rental contract is expiring.
Down payment all the taxes and such as well as still finding the rent to living in the meantime
Herea rough place is about 250k so you need 10% as a deposit so there's 25k
Stamp duty is 6% so there's another 15k
The other moving costs at least 10k but if you want to fix the issues and refresh the place make it 50k
So you need 50k-90k in the bank before you start lookingThe down payment is a massive thing to save up for.
I also think zoning laws that artificially reduce the supply and property taxes should be abolished so that the price will be reduced and that the owner can actually own their home and not have to pay off some mafia goons for them not to take it away.
Usually you gotta put a down payment first to get a loan to buy it, the you gotta usually pay a realtor, a home inspector, a well and epic inspector and so on, and that's without haggling over price
Rent is definitely not the same price here it's much higher than a mortgage payment
It isn't.
Dumb fuckers don't understand you have to be nice to people for them to let you borrow their money. Too many fuckwits want to act like shit, then complain when treated like shit.
Rent is far more expensive than a mortgage and thanks to democrats the younger generations are fucked 7 ways from Sunday. Most of America makes less than a livable wage
coming up with the down payment is hard. Most young people do not want to sacrifice to attain a long term goal. They are hoping the government will buy the house for them.
I guess the renter would not be able to afford the down payment or get a loan
Saving a down payment
Um, down-payments, credit ratings, and interest rates, maybe?
- u
that's why I rent to myself...
Rent and a mortgage is NOT the same.
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