In Riverside CA. The price of rent is higher than in most of the entire country. It seems like everyone wants to live here! I don’t blame them. It’s a great place to live. But one mistake people often make is renting instead of buying.
Yes, there are a lot of reasons someone may want to rent. But, too often the main reason people rent is because they think they can’t afford a mortgage. The truth, however, is that the cost of a mortgage is often around the same cost of renting!
Consider the average cost of a 3 bedroom 2 bath house in Riverside, about $300,000. With an interest rate at 4% (and it could be lower) and a 30 year term you are looking at a monthly payment around $1,432.
Just for the fun of it I went ahead and tried to find a 3 bed 2 bath home for rent in Riverside. The monthly RENT I found on one was $1,965. That’s $533 MORE than a mortgage. So it’s not always cheaper.
In fact, in the long run it is much more expensive. When you pay a mortgage every month you are building what is called equity. It’s basically like putting money into your own saving account. When you pay rent that money goes into the pocket of someone else. So you lose that money by renting, but you “save” the money through buying.
If you ever need the money that you have paid on the house over the years you can regain it through the sale of the house. You can’t do that when renting.
Do You Qualify?
The second reason people often look into renting is because they think they don’t qualify to buy a house. Their credit score may be poor, they may have a bankruptcy in the past, or they may not have the money for a down payment.
But, if you live in or around Riverside CA there are multiple down payment assistance programs and loans. So you may not have to put anything down by yourself. I can help you find a lender who knows about these options if you contact me.
If you do an FHA loan you can even put down 3.5% instead of 20% if your credit score is 580 or above (as of the date of this post). You can also rebuild your credit in as little as 90 days if it’s too low. So don’t just assume you can’t afford a down payment. Let me help you figure out where you REALLY stand.
Even in the worst situation I can refer you to a home loan program that I know of funded by private lenders. This program focuses more on your ability to pay the monthly payment than your credit. Give me a call or email to learn more about it.
So knowing all of that is renting really the best option?
March 25, 2020 at 8:22 am | Uncategorized | No comment