Buying V Renting In Today’s Baltimore Economy
To buy or not to buy? That’s the question being asked by renters up and down Baltimore. Traditional wisdom says it’s wiser to be a Baltimore homeowner than a home renter, since your monthly home payment goes towards a benefit that you own. Although in today’s topsy-turvy, credit-crunch world, is it always better to buy than to rent?
We discovered the pros and cons of renting and buying in the current economic climate.
Baltimore Home Buying Pros
Recent research by Baltimore HUD Homes shows it’s cheaper to buy a typical first-time buyer home than to rent one in Baltimore.
The biggest downsides to renting are the cost you have to pay upfront. Having to stump up security deposits and rent in advance can be difficult.
Hard earned money paid in rent pays off your landlord’s mortgage, not yours, leaving you with not anything to show for your cash.
There’s no guarantee that you will be able to stay in the property when your one year tenancy runs out. In the worst-case situation, you could find yourself homeless even sooner if your property-owner fails to keep up with their mortgage, leaving you with all the annoyance and cost of having to find somewhere else to live.
Receiving your security deposit back from the property-owner can be tricky. You’ll often have to shell out for skilled cleaners and make certain the whole house is almost perfect in order to receive a full refund.
Placing your personality into a home can be tough if you’re not permitted to decorate. Some landlords will let you paint rooms; nevertheless others prohibit you from hanging new pictures on the walls, let alone refreshing the color scheme.
Once something does go wrong, it’s up to the landlord to sort it. At the same time as this can be wonderful since someone else has to deal with the dilemma and pay for it, you might have to wait for them to sort it out, which doesn’t constantly happen instantly.
Baltimore homes are cheaper. House prices have drop by more than 20% since the market peaked, consequently if you buy now, you’re absolutely getting a better deal than you would have done 18 months ago.
Interest rates have been slashed to a record low, making mortgage payments more reasonable than they have been for years. Other than one thing you can be sure about is that rates will be on their way back up at some point in the future, so it may be worth considering taking out a fixed rate mortgage if you want to ensure your payments don’t rise. Evaluate mortgage deals.
The money you pay out on housing every month goes towards paying off your own mortgage. This is an asset in your future, to a certain extent than your landlord’s, so you’re slowly get your hands on an asset.
In the existing Baltimore real estate market, some sellers are primed to agree to large discounts on their asking prices, predominantly if they believe the price of their home is falling by the day. Forewarning, as soon as the market stabilizes, folks will be less likely to do this.
The Government pioneer a first time home buyer credit of $8,000.
As a homeowner will build up your credit rating, as you can exhibit to probable lenders that you’re able to maintain up with your monthly debt obligation.
If you have an unused room you may perhaps always make some additional cash by renting it out.
The days of lenders being happy to advance high loan-to-value (LTV) mortgages are long disappeared; consequently you will have to save up a down payment if you want to buy a home. FHA mortgage deals still remain for people with a 3% down payment.
While renters don’t have to be anxious of shelling out for surprising maintenance bills, if it’s your home, you’re the property-owner, and the cost is on you!
Baltimore Rental Pros
It’s hard to sell properties in the current real estate market, making it hard to change location if you need to move in a rush, particularly if you’re holding out for a respectable price.
It’s less easy to take a job Sabbatical break if you own a property as you’re tied down to a mortgage. Conversely, you could think about renting out your home while you are away, and you may even make some money doing this if you have a low mortgage.
You may perhaps fall into negative equity, meaning the assessment of your home drops below that of your mortgage, making it hard for you to sell up and move on if you want to.
Renting might be a better alternative for anyone concerned about the security of their job. Most rental contracts last one year and sometimes offer relocating clauses, giving renters whose circumstances change, the option to relocate if the worst should happen.
If you need to relocate to a new area, renting a place gives you a chance to get to know the location without tying you down to staying there long term.
Despite the fact that owning your own home might make better financial common sense in the long run, it’s a big obligation. If you rent and fancy taking a career break to travel the world, for example, there’s nothing to stop you!
In the current Baltimore real estate market, it’s imperative to try to separate yourself from the obsession mediating homeownership. In its place, center your attention on whether now the right time for you to buy a Baltimore home, or whether your situation mean you’d be better off renting for a while longer.
Tags: HUD HomesRelated posts
Posted by Carlos Sagastume on April 16, 2009. Filed under HUD Homes.
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