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Owning a Home More Affordable Than Renting

[ 0 ] June 8, 2011 |

It is a common misconception among renters that homeownership is truly within their reach and can be more affordable than renting.   It may also be surprising to note that you don’t need a large income or down payment to get the ball rolling.

For example, a yearly income of $50,000 qualifies you for an approximately $170,000 purchase price.   There is no shortage of selection at this price range as there are over 1,300 listings in Dane County that are $170,000 or less.   A $170,000 mortgage calculates to an approximate monthly payment of $1,300.  Compare this to the average $1,275 per month rent per 3 bedroom unit in Dane County.  Purchasing the home in this example would also qualify you for an additional $472 approximately on your next tax refund.

Let’s look at this same example with a yearly income of $40,000.  $40,000 qualifies you for a home purchase of approximately $135,000, which calculates to a $1,000 monthly mortgage payment and would increase your tax return by approximately $761 for a single filer.   Since a home in this price range is likely to require some maintenance,  there are special programs available in the City of Madison that offer up to $40,000 for rehab and remodeling – just ask your Realtor® or Lender about how to take advantage of this program.

owning more affordable than renting

There are also several agencies out there that offer down payment assistance, with some offering up to $25,000.   These programs are obtained by the buyer as part of the purchase and financing transaction.  Get in contact with a lender, they will be more than happy to discuss with you how these programs work.  If you need to select a lender, take advantage of the new Get H.I.P program, and use a lender that will offer their services at a discount to you just for working with them.

So, maybe you CAN buy a home for less than you are paying in rent without the large salary and down payment that you initially thought you needed.  If you are thinking about buying, head on over to our website and sign-up for an i-Find account.  Here you can save your searches, be notified of new listings that match your search criteria, set price trackers, and track neighborhoods.  These services are free and you will only be contacted by our real estate professionals if you reach out to us first.

Have questions about the financing and programs mentioned here?  Feel free to contact us!

All MLS statistics from WisconsinHomes.com

 

 

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Category: Buyers, First-Time Home Buyer

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