Mortgage Monday: Rent vs Own

Rent vs Own

I met a young couple yesterday at a listing I have for rent. The rental cost is $2,200 per month with a $4,500 deposit. If they wish to rent this property they will have to bring $6,700 to the table. Yes, that is less than what they would have to bring to the table for an FHA loan for a $300,000 home.

But, if they went to Key Bank with two years of rental receipts and at least one credit score of 620, they could qualify for a “First Time Home Owners” loan with $0 down payment. They would need only about $8,200 to close, and their payment would be only about $2,150, which would be a savings of about $50 a month, which translates to a savings of about $19,000 for the life of the loan. Does it make more sense for them to buy than rent? I think so.

Check with a loan officer at Key Bank for a more accurate estimate of costs and payment amounts. These are only estimates based on my knowledge and are not to be considered a quote for a loan.

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