Realtors will be quick to reply that you should buy, but let’s face it, we’re biased. If you want an objective opinion do some research online. The Department of Housing and Urban Development is a great resource for those of you who want to educate yourselves on how the advantages of Buying vs. Renting a home apply to your situation. In addition to the step-by-step process outlined on their website: http://www.hud.gov/buying/index.cfm there is a handy little calculator on realtor.com that will help you decide whether or not it makes sense to buy a home: https://www.realtor.com/mortgage/tools/rent-or-buy-calculator/ Click on advanced options. There you can enter in your current rent, let’s say $750 per month. Enter in the purchase price of a home, for this example we will use $200,000. Enter the percent down from your lender, but don’t forget about Idaho Housing, FHA, Rural Development and USDA loans that offer lower down payment loans. Then put in the number of years you plan to stay in your home. The default for this field is 30 years, but you can put in whatever you like. The yearly property tax rate is defaulted at 1 percent, so you may want to check with the Assessor or your Realtor to get a rate for the home you are considering buying. The calculator also projects a modest appreciation of 2 percent per year for the time you are in your home.
Now just click “calculate” and a new table will appear beneath the calculator showing the appreciation and the cost of renting versus buying a home. In the example given, you will begin saving money after the first year and continue to save for the next 29. This is an excellent tool for consumers and Realtors alike and it will help you understand, before you get emotionally involved in the concept of ownership, whether or not you can afford a house. As always, if you have good credit and don’t plan to move for a few years, odds are great that you will save and even make money on buying a home in today’s market.
The HUD site actually has tons of great information that will help you determine what makes sense for your situation. There are links to walk you through the buying process, from determining what you can afford to what to expect at signing documents and all things to consider between, buyers will find this site extremely helpful, easy to navigate and very informative. You can even find out the loan programs listed at the beginning of this article.
Trust an expert…call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
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Kim Cooper is a real estate broker and the spokesman for the Coeur d’Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d’Alene Association of Realtors, 409 W. Neider, Coeur d’Alene, ID 83815 or by calling (208) 667-0664.