I Can Afford To Rent, Can I Afford To Buy?
“If I can afford to rent, can I afford to buy?” or “I pay $1,500 a month in rent, how much of a mortgage could I afford if I only wanted to pay 1,500 a month?” are questions we hear all the time. And you know what, they’re good questions. The problem is, it’s a complicated question.
The truth is, that is a far more loaded question than you might think. A mortgage payment consists of more than a couple elements, elements such as HOA and mortgage insurance, which can be a considerable chunk of your payment, are determined by outside factors. Not to mention things such as down payment, loan program and rates all being determined by lender guidelines. So a lot of the time, this question leads to more questions, and before you know it, a simple inquisitive remark turns into a full on pre-qualification conversation. And that might not be what you’re looking for.
Imagine you’re at a party, and your buddy Scott, a strapping young lad, is in mortgage planning. You casually ask him, “If I can afford to rent, can I afford to buy?” and he starts babbling about percentages, down payments and starts speaking in acronyms. Sorry you asked right? But the truth is, that’s the only way to answer the question. Now I’m not saying we need to pull credit and verify your employment t give you an idea of where you stand, but to answer those questions properly other factors need to be considered.
So here’s my answer, to these questions. “I can afford to rent, can I afford to buy?” “That’s a good question, and I have done loans for people where there mortgage payment is around what you pay in rent. So, if you’re serious about seeing what that might look like for you, give me a call sometime.” “I pay $1,500 a month in rent, how much of a mortgage could I afford if I only wanted to pay 1,500 a month?” “That’s a great question, and it depends on a lot of things, if you want to see what you would qualify for with that payment in mind, give me a call sometime.”
Not so black and white, but true.
If you want to know how your rental payment correlates to your specific situation, give me a call or e-mail me at;
858.273.3663. ext 114