Mortgage Information and insight from a Utah Mortgage Lender.

Rent vs. Own - Right Now The Answer is Easy

 

I am sure their will come a day again soon where the proverbial question should I rent a home or buy a home will actually be a difficult one.  Fortunately for most right now the answer is easy, BUY!!

Here are a few reasons why I personally feel its not even a question (at least for the next few months).

1.  FREE MONEY.  With the feds handing out $8,000 big ones for the next few weeks and possibly months depending on your contract why not take old Uncle Sam up on a big hand out.  It's kind of like having the rich uncle I never had, except Uncle Sam is not rich but he acts like it and he has a money printer so whats the diff?

2.  Lowest average interest rates in nearly 40 years.  Yes there have been a few dips where rates were a few 10th's of a percentage point lower then they are today but on average there never has been and never will be a time where you will pay The Man less interest on your loan.

3.  Low Home Prices.  With bank owned REO properties dotting the landscape and short sales starting to pour in it has brought all of the home prices here in Utah back down to a manageable price range.  You can pick up a great starter home built in the last 10 years with everything you NEED for less then $200,000.  Need being the key word there.  Sure you can still spend as much as your heart desires on a home but at least the entry level homes have come back down to earth.  When the banks finally churn through their foreclosures watch out as the cost of building a home has not come down as much as the prices have so I expect the price of new home's to jump back up in the next 2 years.

4.  Tax breaks.  In a time where there is no where to go but up for our taxes you need to have every tax advantage you can.  The 1098 tax form from my mortgage company is the only letter they send me every year that I am happy to see in the mail box.  It will literally increase your tax return by $1000's of dollars every year.  Not to mention energy saving tax credits you qualify for when you do energy improvements to your home like adding insulation to the basement, attic and air ducts.

5.  Having something you can call your own.  Can you even put a price tag on being able to paint a wall any color you want any time you want with out having to call your landlord for approval.  How about if you want to switch from cable to direct tv, you wont be at the mercy of your landlord who may put the kibosh on any satellites on the roof.

6.  Building equity for you not your landlord.  I actually am a landlord and do own rental property so in the essence of full disclosure I have to admit that I do benefit from tenants who help build my equity.  If they ask me I always tell them that we need to get them on the road to home ownership.  It's everyones right to own their own piece of property, a place they can call their own.  For some the road to home ownership is longer then for others do to credit issues, income limitations and for other very valid reasons.  There are those that could be buying a home right now, those are the ones I am talking to when I say stop building your landlords equity and start building your own.

7.  Neighborhood, schools for your kids, growing your own garden.....

 

The list could literally go on and on but I think you catch my drift.  Right now with the financing options that still allow some to get into a home with little or NO down payment there is really no reason (if you qualify) you should be renting over buying a home.

Here is a link to a great Rent vs Buy Calculator you can go to and plug in your own numbers or those of a client if you are an agent and have a client that needs a little more proof that renting is better then buying.  With this Rent vs Buy Calculator you can see if a dollar amount how much of an advantage it would be to buy a home right now over continuing to rent. 

So if you live in Lehi, American Fork, Pleasant Grove, Lindon, Orem, Provo, Springville, Spanish Fork, Payson, Santiquin, Saratoga Springs, Eagle Mountain or  even Ogden to St. George you should really take a closer look at buying rather then continuing to flush your rent money down the toilet every month.

Take the plunge get pre-qualified today!

Stetson Lowe - Security Home Mortgage

Security Home Mortgage is a correspondent lender.  We are a leader in Utah in FHA, Utah Housing, USDA Rural Development, Conventional Fannie Mae and Freddie Mac Mortgages.

$8000 - $6500 Tax Credit - Tick Tock, Tick Tock

 

Somewhere In, UT

Tick tock, tick tock, the clock is ticking on the tax credit currently available to first time home buyers and those that have lived in their homes for 5 years who are looking to buy.  The program comes to a close on April 30, 2010.   First time home buyers in Utah have the most to gain as the government by way of the IRS is going to line your pockets with $8000 big ones just for signing on the dotted line(s) at closing.  Yes line(s) is plural because there are hundreds of lines you will be signing on.

Where was my $8000 handout when I bought my first home?  No where to be found I can tell you that.  All I got was a crappy 2/228 arm from Long Beach mortgage with a 7.25% rate and a cheap welcome package from our builder.  Man o man what I would have given to get the $8000 bucks that these kids are getting today.  I have some clients that are using it to buy furniture, some are planning to landscape and still some others are paying off their car loans.  No matter how you use it, you can't really lose as long as you don't miss out.

Slightly less enticing but still amazing is the $6500 available to those that have lived in their current home consecutively for the last 5 years or more.  Although not quite the $8000 being shoveled out to the greenies $6500 seems to be enough to get some of the fence sitters off the fence and into the game.  I have several clients out looking right now so they can cash in just in time to claim their prize.  One lovely lady I explained this move up credit to was attentively writing down notes so that she could go back to her husband with exactly what they qualified for and see if she could use her best methods of persuasion on her husband to get him to leave their home of 26 years and cash in on one of the many bank owned deals of a century that are to be had right now in Utah County.   I didn't ask what her method was.....moving on.

The moral of the story folks is to make sure you understand the time lines and deadlines to this program.  As much as I would like to see it extended over and over again, I tend to think that all good things must come to an end, at least that's what my Mom used to tell me when we were leaving Lagoon after our annual Questar family day, boy how I hated to see those days end.

We can get mortgage's done start to finish in as little as 7 days but why wait till the last tick of the clock?

For more useful information and frequently asked questions on the federal tax credit go to http://www.federalhousingtaxcredit.com/ I found this site to have some great information on the topic.

Your comments are always welcomed.  Stetson Lowe is a expert in the mortgage industry specializing in FHA, Conventional, USDA and Utah Housing Loans.  Don't attempt to blog like this at home:)