How Long Do You Plan to Keep Renting?

So many things fluctuate; gas prices, the weather, the housing market and/or our mood/attitude towards these things. These things go up and down throughout the year, some on a monthly, daily or hourly basis. One thing over past 3 years I've noticed that doesn’t fluctuate down at all, is RENT!!! No matter the economic climate, rent seems to continue on an upward trend regardless. This causes me, as a Contractor and Realtor, to wonder why so many people feel they can better afford to rent rather than buy.

I hear a lot from individuals that are just getting on their feet and buying seems like a HUGE deal, understandably so, this decision is up there as one of the biggest financial decisions one will make in their lifetime. I often hear from those seeking advice, but are reluctant to change their situation, “Well I don’t plan to live in the area very long" or "I can’t afford to have a mortgage and bills every month” or "I don’t want the hassle on taking care of a property”. All are worthy reasons to hesitate about buying a home but, my answer is always the same, if you are even considering taking the big step, it is worth sitting down and having the conversation of how much will you save in the long run? When is it worth paying towards your OWN mortgage verses throwing cash into the money pit that is, renting?

Buying is not for everyone and that I understand, but for those wanting a home of their own, you'd be surprised at the benefits that come from taking the big leap. For example, I had friends that were renting a 1 bedroom apartment in Downtown Lexington, great location, but they were sacrificing a lot when it came to the little parking available. The shared "yard" or patch of grass near a busy road that was available to let their pup out. Did not leave much to be desire and the trek down several flights of stairs wasn't ideal for those early mornings. Sounds enticing right? To add to this, rent in this area is close to $1,000! Not including bills. I was able to get them financed with low down payment and closing costs covered by the seller. All of a sudden 30 days later, they have a 4 bedroom house, big fenced in backyard for their dog, and a mortgage around $300 dollars less than they were paying for when they rented a one bedroom apartment.

You see without taking the time to sit down with a knowledgeable agent and lender, individuals who are renting don’t know of the vast options when comes to financing.I could tell you all about the all time low interest rates and programs specially made for first time home buyers, but are you ready for that conversation? Many who are renting are losing out on opportunities to get the home they always wanted because they are not equipped with the right information.

Here are three steps to consider:

Step One: Talk to a Lender. Set a meeting, this is just a conversation! Do not be afraid. During this have them pull, what we call, a soft pull on your info (that way it won’t ding your credit). This will give you a better visual of what you could have available to you and what will be needed in order to be able to buy a home.

Step Two: Get Serious. If you are serious about buying a home, the lender will need to do a credit check, they will go over your taxes and information to make sure you are financially ready to get the ball rolling! This will allow them to get you a Pre-Approval letter, which will allow you to know what price range you will need to stay around to find your home.

-Pro Tip: Consider going to more than one lender. (Within 60 days this will not effect your credit score). This can make a huge difference and will allow you to see which lender offers the best interest rates and closing fees, etc.

Step Three: Sit Down with a Knowledgeable Agent. Let's go over your criteria: your needs and wants in a home. My wife wanted an open floor plan, non-negotiable, so what a waste of time would it have been to go to 100 houses that were closed off?

-Pro Tip: This is SO important, get an agent that is willing to ask you 500 questions about what you are looking for. Sending you 500 homes to go through to try to see if it fits your criteria can be daunting, time consuming and frankly, it is lazy on the agents behalf. Remember that a buyer agent is on your side and are there to help you find a home. This won’t cost you EXTRA money. (That is negotiated with the listing agent and seller).

If you are renting, but feel ready to step away from paying someone else's mortgage. If you feel prepared to do the home-work and have the conversation about buying and are ready to pay on your own mortgage verses rent - Get started on Step One, Two and Three. Taking the first step is crucial to a better future for you in the years to come! If you have any questions, feel free to reach out.