The Experienced Main Line Realtors® at Sage Realty Discuss Renting vs. Buying a Home
Home ownership is a dream for many Americans, however, a large portion of them are still renting homes. Why are so many people reluctant to buy when in most cases, renting is more expensive? Sage’s Main Line Realtors® discuss home buying vs. renting.
Financing is the leading cause of stress for new home buyers, with many worried about the ability to save up for a down payment. New home buyers can have difficulty accumulating cash for a down payment, but some may have access to gifts from parents or can tap into their tax-deferred accounts. Even though, according to a recent Welcome Home survey released by the Pennsylvania Association of Realtors® (PAR), 1 in 3 home buyers who have an income of less than $50,000 can pay for their new home with cash, these are mostly older buyers who are using the proceeds from the sale of their previous home. While saving for that large of a sum can be difficult, saving for a lower down payment is doable. Finding the right lender is key to real estate success.
As Main Line Realtors®, we find that many potential home buyers still have the impression that they will be required to have a 20% down payment. The truth is, a buyer can purchase a new home with as low as a 3% down payment. That percentage is a lot less daunting and makes home ownership more achievable for many.
In addition to down payment worries, many renters feel that their credit scores are too low to allow them to qualify for a home loan. A recent study by Ipsos showed that 62% of people believe they need excellent credit to buy a home. In February of this year, the average FICO® Score for all loans that closed was 720, with some scores being in the 680s.
The Chief Economist at Realtor.com®, Jonathan Smoke, recently wrote “Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.” So renting is already more expensive than homeownership, and that situation is only going to get worse, making saving for a down payment more difficult.
Call Sage’s Main Line Realtors® to Find Out if Now is the Time for You to Buy a Home
At Sage Realty, our Main Line Realtors® help buyers find their perfect homes, keeping in mind amenities, walkability, schools, and anything that is important to our buyers. We work with many lenders and stay abreast of current rates and requirements for home loans. With our knowledge and experience, we assist our clients to help make the process of buying a home as stress-free as possible. Contact us today for a free consultation to help determine if now is the time for you to become a homeowner!
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