Please make sure that you're sitting when you read this: a staggering 49.3% of tenants Americans spend more than 30% of their income in rent, according to the Joint Center for Housing Studies at Harvard University.
what is the cause of this trend? Part of it may be that the cost of the rent increases faster than revenues.
then how can combat you it? Appropriate budgetary support. However, in the right situation, your best bet to avoid the problem of rent may be to avoid rentals altogether.
look at the bottom line
it is generally not recommended to spend more than 30% of your income for housing costs. It jeopardizes the rest of your financial life.
in this regard, it is best to determine how much you can afford to spend on the rental or the purchase of a House and go from there.
there is no substitute for a budget line item in this field. Look at housing as part of your overall spending, and come to a number you are comfortable. Don't forget to leave a little money for savings and investments, or emergency side.
If you feel that you spend too much, it may be time to downsize or look at the other options.
once you have a number in mind, it is time to understand that you have to rent or buy.
rent or buy
the rental and purchase have some key advantages, while one is right for you? Let's take a look at the history of the band.
why rent?
hire can be good for several reasons. We will go through those.
renting an apartment can be a logical first step for a lot of young people just getting started. When you start first on your own, you may only need a small place, and a decent apartment can be exactly what need you. This also gives the opportunity to accumulate credits by making payments on time, so you can get financing for a car or a house down the line.
leases also provides a degree of flexibility. If you move a lot, the idea of being able to get out of the lease after a year without having to put the property on sale may appeal to you.
Finally, some comfort items are included when you have an apartment. Under the terms of the lease, utilities, Internet and cable can be included in the rent.
Why buy?
as compelling as the case may be to rent a place, there are a lot of reasons to buy. Each market is different, but the chances are that it's more affordable than you think.
the biggest reason to take the plunge and buy your own place from a logical point of view, it's that you get something for your money. When you give your money to the landlord, you get nothing back of investments except a place to stay.
on the other hand, when you buy, you earn equity with each payment you make. This equity is very much like a traditional investment may be translated into money.
how does this work?
once you have built up equity for awhile, you can refinance to get the money out and use it for other purposes, such as helping to finance a college education or your retirement fund to give a boost to catch up.
, you can also create faster value in the current market as home values have been rising for some time now. If the value of your property increases, you benefit from the gain in the ratio for the calculation of own funds has to do with the value of the property.
is not only buying an investment, but it may be more cost-effective than renting. With rates as low as they are, you can be able to own a home by paying as much or less than you pay for the monthly rent.
there is also something attractive to have a place that is yours when you get home. You can really make your own space. Watch your children play on the tire swing in your front yard. It gives you a chance to really get involved in the community because you won't go to the next place when rent goes up in a year.
deposit
Although there are some benefits to a higher down payment, you should not let the fact that you do not have 20% to put down keep you get a House.
there are a variety of options if you are looking to put less down. With a conventional loan, you could put as little as 3% of the standard programs. If you go with an FHA loan, the minimum is 3.5 percent.
so that always seems a lot to build fence, Quicken Loans has a new exclusive and exciting option for qualified customers. You can buy a House with as little as 1% down while earning 3% of the capital. This means that you can buy a House for $150,000 with a down payment as small as $1,500.
there are a few restrictions: you must have a minimum FICO credit score of 680 and you should be buying your main property.
If you are ready to call rental on the sidewalk, get your mortgage process started. If you have any questions, feel free to let us know in the comments.