written by Emily Merkley, association executive, Cache Valley Association of Realtors®
We’ve been hearing the phrase “New Year, New You” over the last few weeks with intentions to make changes in self-improvement, finances, and to set goals, both large and small. This shift in mindset should apply to your goals of homeownership as well. If you’ve been renting for years and feel that it’s all you can afford due to the current housing market, would you be surprised if you learned just the opposite might be true?
The choice between buying a home or renting is usually a tough decision, but if you crunch the numbers, you may be surprised to find that a monthly mortgage payment is pretty close to what you already pay in rent. The average monthly rent in Utah is just over $1,000, and that cost can increase as landlords adjust prices to keep up with rapidly rising costs of rent. Compare an ever-changing rent to a monthly mortgage — which is locked in regardless of market trends.
The median income for Cache County is $53,812, which can qualify you for a mortgage on a $200,000 home, with a monthly payment (principal and interest) of $998*. The major difference between a $1,000 rent and a $1,000 mortgage, is the accrual of equity. Your first year of mortgage payments can accrue an estimated $3,021 in equity, with $3,436 in year two. This equity continues to grow year after year. Now is the time to make the long-term investment that will add equity to YOUR future.
The assistance of a REALTOR® is crucial when making the transition from renter to homeowner. A REALTOR® can help you determine your cost range for a home, map out your financial possibilities and parameters, find a home that fits your needs, and help you find the best mortgage options to make homeownership your reality this year. Homeownership provides you the financial security to make a major investment and then watch it grow over time. It’s a major milestone and your own little slice of the ‘American Dream,’ and it’s all within your grasp.
*Qualification is dependent upon credit worthiness and history, and monthly debt to income ratio. Monthly payment estimated with $0.00 down and the current average interest rate of 4.37 percent.