Jim’s Mortgage Corner | Immovable


CONTINUE TO RENT OR SHOULD YOU BUY?

This is one of my favorite questions because home ownership has so many benefits. While homeowners are happy that you rent out their home, you are essentially making the payments for them and helping them increase their equity, which you could do with your own home.

So why do rent payments keep going up? In 2010, the rental vacancy rate peaked at 7.32% in Grand Junction. According to the Colorado Department of Local Affairs, the Grand Junction area has one of the lowest vacancy rates in the state at just 2.7%.

The median monthly gross residential rent in Grand Junction, Colorado (the Grand Junction metro area) was $ 981 in 2019 according to the ACS Census survey. This is an increase of 10.85% over the previous year.

The Western Slope real estate market continues to show year over year growth. Today’s housing market offers great opportunities, making it a better time than ever to buy and providing first-time homebuyers with more buying power!

You might be surprised how much you can afford based on your rent payment. Since your mortgage payment includes principal, interest, taxes, insurance, and possibly mortgage insurance (depending on your down payment and type of loan), a payment of $ 1,400 could be equivalent to a price of $ 1,400. purchase of $ 240,000! Your interest rate and payment may vary depending on the loan program, but this gives you a good estimate.

Let’s compare rent and homeownership. According to Kate Porras at Re / Max 4000, the average home appreciation over the past five years in Mesa County has been around 11%. If you bought a home for $ 240,000 in 2021 and we’re using an average appreciation of 11% per year, your home could be worth $ 328,231 in just 3 years! If your initial down payment was 3.5% (using an FHA loan as an example), your initial loan amount would be $ 235,653, which includes mortgage insurance. After three years of your normal monthly mortgage payment, your loan balance would be approximately $ 220,600. In this example, you would have earned over $ 107,631 in equity in three years! If you continue to rent, it is estimated that an existing rent payment today of $ 1,400 can increase to as much as $ 1,661 by the third year and you have no equity to demonstrate.

There are many loan options available which may only require a small down payment. Many lenders work with the Colorado Housing & Finance Authority (CHFA) ​​to provide down payment assistance grants and zero percent second mortgage loans for down payment assistance and / or assistance with closing costs, which can save you as much as $ 1,000 on your new home.

Homeownership has many benefits, including:

ï‚· You can build equity in your own home.

ï‚· Your rent payment is not tax deductible. By comparison, the interest portion of your mortgage payment could be tax deductible. Please consult your tax advisor.

ï‚· Your apartment shares walls, ceiling and / or floor in relation to the privacy you experience when you own a single family home.

ï‚· As you have experienced, your rent almost always increases when your lease is renewed, but with a fixed mortgage the principle and interest never increase.

ï‚· An apartment may only look like a place to stay, but owning a house gives you pride in owning it.

Plus, you don’t need perfect credit to buy a home. Most loan programs can work with borrowers with scores as low as 620.

Many renters CAN afford to buy a home but don’t realize it. I encourage you to contact your lender and they can provide you with the many loan options available for home ownership. Please do not hesitate to contact me directly if you have any further questions.

Branch Manager, NMLS # 1721861

Cherry Creek Mortgage, LLC, NMLS 3001


About Mallory Brown

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