If you are still renting you are paying a mortgage… just not your own.
Investors who consider buying a rental property take into consideration how much rent can be charged compared to ownership costs. They need to make sure they have positive cash flow after all expenses are paid. But renters need to consider how much they can comfortably afford each month for housing and utilities. As rent is paid each month, the investor uses that cash to pay the mortgage. So, in essence, a renter is paying a mortgage, but one that belongs to someone else.
Lenders view about one-third of gross monthly income as a guide to affordability for a mortgage payment. For first-time home buyers, there are lots of documents that need to be reviewed, as well as credit scores, employment and income. It can be an intimidating and stressful process.
Owning compared to renting is a goal for most renters. Actually in today’s market with monthly rent increasing in many areas, it may be cheaper to own than to rent. Renters can do their own research online to find current interest rates and run mortgage calculators to determine monthly payments. But it is important to be in contact with an experienced mortgage loan officer.
A real estate agent usually has several loan officers that are trusted and highly recommended. These loan officers can give an estimated range of affordability, down payment needed and associated closing costs. If qualifications are not positive in the short-term, the loan officer can give guidance as to what changes to make so that home ownership can be a long-term goal.
There are so many down-payment resources available and loan package options, renters should investigate whether or not they can qualify for any of these programs. Be sure to visit our website under BUYING for a wealth of helpful information. With a pre-qualification letter, we can find you that perfect home!!