As a renter, you know the obvious steps like creating a budget or saving up for that down payment, but take these 5 steps into consideration before moving into your dream home.
The real price of homeownership
As a renter, we are used to paying a one-time rental fee that covers us on our monthly housing payment. As a homeowner, there are four main factors that go into our payment: principal, interest, taxes, and insurance.
- Principal, as we know, pays into the loan balance each month. While the interest is the fee for borrowing the money.
- Taxes are essentially property taxes, which is based on the area you live in.
- Insurance, which is chosen by you and usually agreed upon by the lender, assures lenders that the home will be covered in case of any type of disaster.
If you decide that you want to go the condo route, the additional cost of the homeowner’s association fee (HOA) comes into play. Which covers routine maintenance to the general common area of the condo neighborhood.
Homeowner tax benefits
The mortgage interest and property taxes reduce your taxable income and are deductible when you file your tax return. These are huge helpers when it comes to lowering the cost of homeownership.
Study Buying vs Renting math
Although you focus on the principal, interest, taxes, and insurance to a rental payment, make sure you take a look at the tax benefits for homeownership costs and rent costs.
Find the right mortgage for your budget & timeline
A lot of us don’t have the 20% to put down on a home, but there are mortgages that require as little as 3% down. However, anything less than 20% requires you to pay for mortgage insurance, which is a considerable percent of your loan amount, which isn’t even taxable.
It’s all about the credit score
Your credit score is key when it comes to getting the best mortgage with the lowest rates. Lenders are always looking for a dependable on-time payer. So more credit accounts are better to establish a good credit history.
Regardless of your situation Suncoast Property Management has any and all options for when you are ready to buy a home or maybe continue leasing. Get in touch with us to find out more and see our available homes!
