Posted March 20, 2023 in Real Estate Trends
Let’s start with this ridiculous rental market…
In the Columbian (2/7/23) there was an article about the struggles tenants are facing in the rental market. This year isn’t looking to be any better. The struggle of rent increases in the hundreds of dollars every year. I am not sure how you are expected to absorb rent increases every year of $100 -$300 a month.
How much of your monthly income goes to rent? Is it above 40%? The average first time home buyer has a mortgage payment of about 40%- 45% of their monthly income but the difference is that your monthly mortgage won’t increase by hundreds of dollars a month next year. Buying a home is daunting, and stressful, and seems so far out of reach for most people. My husband and I took a chance in 2001 when we bought our first house. Our mortgage was almost $800 a month more than our rent had been.
First, we took a home buying education class, that didn’t talk about anything that made any sense. We felt that buying a home was further out of our reach than before. We went ‘house dreaming’… aka looking at houses, and new build home models. This was the first mistake we made. Definitely do not go house shopping without knowing how much you can get preapproved for, or can afford. We did end up meeting with a lender who was able to explain the process so much better, and went over the funds involved. To move to a different home we were going to need first month’s rent, last month’s rent, security deposit, cleaning deposit, and other deposits. To buy a home we needed earnest money, inspection fee, appraisal fee, and closing costs. We had declared bankruptcy about 2-3 years before this because we were poor and there were medical expenses and things that we could not keep up. We were 2 years past that bankruptcy so we qualified for a FHA loan. With our credit (which was not great), we even qualified for down payment assistance. Then, we got closing costs help from the seller we bought our home with. What we needed to buy a home was LESS than what we needed to rent a different home.
When we sold that first home, we took the equity and put it into our current home. We have lived here 6 years now, and frankly, I could not afford to buy our home for what it is worth right now. Our mortgage is now less than what many of my clients are paying for their rental homes.
Take the Home Buyer Education Class (www.LearningToBuyAHome.com), or a different class. Ask questions! Don’t feel pressured. Realize, and come to terms with that, yes, you will have to compromise. Remember this is your FIRST home, not your last home. Maybe you take the class, and talk to the lender and you are not ready yet. Just because you aren’t ready yet, doesn’t mean that you won’t be someday. A good lender will continue to work with you, or be available for questions. A good Realtor is the same. Remember that real estate is not about ‘sales’. Real estate is about relationships.
So, whether you want to use me as your Realtor, or you already have someone else in mind, please get some education. Whether this is your first home, or you already own a home, and are wanting to sell, and buy a new home, there is so much more to it than you think.