Mortgage rates are rising: Is it better to buy or rent a house?
- Is it better to buy or rent a house?
- At the beginning of the year, the mortgage rate for a 30-year fixed loan was 3.29% and now it is 5.57%.
- Food, gasoline and of course rent, are now more expensive.
Right now, as mortgage rates rise in US, hundreds of people wonder: ‘What do I do? Is it better to buy or rent a house?’ The truth is that it depends on the needs of each person or family, but we will help you so that you can make the right decision.
At the beginning of the year, the mortgage rate for a 30-year fixed loan was 3.29% and now it is 5.57%, according to Mortgage News Daily. In addition, home prices are up nearly 20% year over year. It’s a fact, mortgage rates and home prices have been rising making it increasingly difficult to buy a home.
Mortgage rates rise: Is it better to buy or rent a house?
On the other hand, the prices of goods and services in the United States are also going up. Food, gasoline and, of course, rents are now more expensive, which ends up representing more and more money in monthly expenses.
Lexie Holbert, Housing and Lifestyle Expert at Realtor.com, told CNBC, “If you’re not sure whether or not you want to rent or buy right now … it’s better to make your decision based on your personal situation and your personal needs.» It is precisely at this point that we want to help you.
Check your personal finances
The first step would be review your personal finances. Owning a home requires having enough monthly income to pay for the mortgage, taxes, and insurance, in addition to basic monthly expenses like utilities. It would also be nice to have an emergency fund in case something happens to the house, Holbert points out. So ask yourself: ‘Am I ready to buy a home?’
If the answer is no, then continue renting. Although, if your goal is to own a home, continue to save. You might even be able to make some lifestyle changes, cutting back on some expenses to help you save for your dream home. “You’ll read that if you cut back on your $4 latte habit, it could really help you save for a home,” Holbert said. «While it’s really good to save, where you’re really going to find that big cash for that down payment is going to be in those big spending categories, like housing or your car.»
Evaluate your time
A second step would be evaluate your time and where you are in your life. So, you have to ask yourself: ‘Do I plan to move or do I plan to settle somewhere?’ Keep in mind that it takes five to seven years to recoup what you spend on a home, Holbert said.
«If your household needs are going to be fairly constant and fairly stable over the next few years, now may be a very good time to buy for you,» she said. “If they are changing, you may want to consider renting so you have the flexibility to move.”
Set a budget
If you want to buy a house, you must set a budget. In other words, ask yourself: ‘How much can I invest in a home?’ Now that home prices are rising, it’s illuminating to know how much you can afford, said Greg McBride, head of financial research at Bankrate.com. “The position you don’t want to be in is falling in love with a house and having your offer accepted and then having to figure out how to pay for it,” he said.
Get organized and think clearly about your investment. You need to set limits so you can find a home that you can afford and that meets your needs. You should also keep an eye on rising mortgage rates and the credit possibilities you have. In case of doubt, it is always better to consult an expert. GOOD LUCK! Mortgage rates rise: is it better to buy or rent a house?
The post Mortgage rates rise: is it better to buy or rent a house? appeared first on Mundo Hispánico.