South Florida is land of the high rises and apartment complexes, but there’s also another side to living here. South Florida also has many beautiful communities that feature homes, homes that could one day be yours. If you are a renter in South Florida and are considering making the transition to buying, this one is for you.
Making the transition can be scary, but we want to help you get beyond the fear of making the switch. We sat down with one of our MLO’s, Tracy Siebald, to talk about both renting and owning and how we can help you secure your financial future when it comes to finally getting a mortgage and buying a home. Here’s the breakdown.
Reasons To Purchase
Mortgage Rates Have Been Low, But They Won’t Always Be
Due to the pandemic mortgage rates have plummeted to an all-time low, prompting many people to take the leap from renting to buying. Tracy Siebald, TFCU MLO adds, “Low mortgage rates play a significant role in total loan costs. Rates are still at all-time lows and the stability with a fixed payment, as opposed to rising rent costs can save a lot of money.”
Interest is paid over the life of a loan when you buy a house, imagine being able to save a few hundred bucks a month over the course of 30 years? That’s a lot of money (we’re talking thousands in savings) that if you don’t take the leap now, you will miss out on. If you have the ability to purchase now, that alone is a very good reason to prompt you to purchase.
Property Values Increasing
Cost is a very big thing to take into consideration when purchasing a home. Like buying a car, you want the initial price to be as low as possible because it helps to alleviate costs, especially when there are so many that come with buying a home (closing, property taxes, etc.). We asked Tracy, TFCU MLO what are some additional costs to consider when transition from purchasing to buying, here’s what she said:” In addition to the monthly mortgage payment, a home needs maintenance, such as repairs, painting, landscaping, etc. Budget for those things and a good suggestion is to also learn handyman skills and lawn and garden upkeep, will save you a lot of money.”
Now know this, purchasing a property that is as low as possible is the goal, however if you’re considering buying now is the time as property values in Florida are rising. According to Zillow, in the past year the average homes value in Florida has increased by 8% and climbing.
Good Investment Of Money
Unlike renting, when you own a home you have the ability to invest your money. Homes have equity in them; what this means is that they have value in them if you were to ever need cash, thus making a home purchase an investment. Those who rent do not have the ability to build up equity, so the money put out for rent only goes out, it never has the ability to come back in. According to a recent study done by FloridaRealtors.org, the average Florida home in 2020 had about $69k of equity, that’s a good amount of cash to make on an investment.
Reasons To Keep Renting
Something to consider when purchasing your first home are all the costs that come with owning. What we mean by this is that you are responsible for anything that goes wrong in your home. If the air condition goes out, that’s on you. If you need a new washer or dryer, that costs is yours and so on. With renting a lot of those costs are covered by a landlord and don’t come out of your pocket. Also, with some rentals utilities such as water, trash, internet, and/or HOA will also be covered. If you don’t have a rainy day fund or savings account set up for these types of things it may be worth It to look into if you are serious about purchasing a home instead of renting.
Ability To Move Around
If you’re someone who doesn’t want roots and enjoys the freedom of picking up when they want, then maybe renting is in your best interest. When you purchases a home, you can always sell it, but there’s a lot that comes with that versus the simplicity of renting. With renting you can virtually choose where you want to live and move around each time a lease is up. Think about where you want to be, if a place doesn’t come to mind then don’t spend money you aren’t sure about. Instead, consider investing it an investment property and renting it out.
Flexibility In Pricing
Renting is more flexible when it comes to monthly payments. What we mean by this is that if you want to pay a certain price in rent, you can do the research to find somewhere that offers that, comparing this with a mortgage it can be hard to get to a desired monthly payment if you don’t have the necessary funds. It can sometimes take a while to get there too as it takes a bit of cash to make a dent in the monthly payments. Our recommendation is to pay your desired price in rent until you have enough money set aside to have a comfortable monthly payment for a future mortgage payment. It may take time, but it is worth it to be comfortable for 30 years than to have to go back in a refinance because you didn’t start off on the right foot.
Do what feels comfortable for you. If you’re going to buy a home, do you research to make sure you are getting the best deal for your money and that the money you will invest is going to be something that makes sense. If it’s a struggle to do so, then maybe it does make sense to continue renting. And remember the wise words of Tracy, TFCU MLO, “Ask yourself, “is now a good time in MY life to buy a house?” Although it is right time for many people, it has to be the right time in your life.” Whichever decision you choose, weigh all the pros and cons to come to a decision that makes sense.
It never hurts to have some help when weighing out the pros and cons. If you need it our team of MLOs is always willing to sit down and take a look at your current situation to help guide you towards your goals.