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Buy Vs Rent
I hope your week is going well and I hope you have a wonderful weekend! I am seeing quite a bit of frustration out there as I know you are with clients that don’t get the house they want, and who knows when this will ever open up again. So yesterday, I started to think are rents pushing prices or are prices now pushing rents? HMMM. Since this market is moving so fast and prices are increasing monthly, I am seeing rental prices start to increase, but not quite at the pace of housing. So here are 3 samples below of buy vs. rent:
1,600 Sq foot 3+ 2 house in Encino CA – Average Purchase Price $1,000,000.00 +/- Rental Payment $4,200.00 +/- Payment on house with 10% down = +/- $5,400.00 // Principal paid per month year 1 – $1,379 = $4,020.00 net cost
1,300 Sq foot 3+ 2 condo in Sherman Oaks CA – Average Purchase Price $585,000.00 +/- Rental Payment $3,000 +/- Payment on house with 10% down = +/- $3,400.00 // Principal paid per month year 1 – $897 = $2,503.00 net cost
1,000 Sq foot 2+ 2 condo in Valencia CA – Average Purchase Price $430,000.00 +/- Rental Payment $2,500 +/- Payment on house with 10% down = +/- $2,450.00 // Principal paid per month year 1 – $659 = $1,791.00 net cost
1,500 Sq foot 3+ 2 house in Valencia CA – Average Purchase Price $700,000.00 +/- Rental Payment $3,600.00 +/- Payment on house with 10% down = +/- $3,660.00 // Principal paid per month year 1 – $1,073 = $2,587.00 net cost
Renting does not save you in any of the above situations with 10% down. The only one it is close on is the 10% down $1 Mil house in Encino, so why are people renting if they are not renting from me? The Kardashians don’t rent so why should you? Even if I ran these with 3.5 or 5% down, it still benefits you to buy. Even if you buy and you have to move because you get your dream job in Alaska as a pipe fitter, then you could rent and STILL MAKE MONEY!
Rates started to increase slightly today. Ehh, it’s one day, but I think the concerns are that people are spending a lot! Have you noticed that prices on everything are more expensive? It’s not just houses.
30 year conventional loans are back to the low 3’s and high 2’s
30 year Government Loans (FHA / VA) are in the mid to high 2’s
High Balance Loans $548,250.00-822,375.00 are in the low to mid 3’s
Jumbo loans above $822,375.00 are in the low to mid 3’s. We can do mid 3’s with as little as 10% down. We can do 1 year findings on these too!
5/1, 7/1, 10/1 Arms are in the low to mid 2’s!
Bank statement loans – They are available with 10% down again! High 3’s to low 5’s depending on down and credit score.
Stated income loans – I have one bank with 30% down, but everything else has to be perfect! Also in the mid 4’s.
0 down loans are in the low 3’s – 660 credit score min right now! Mid 3’s for the most part
Private Money lenders – hard Money Loans – 35% down!
First time Buyers Tax Credits are back, but on a very limited basis! 20% Tax credit on the interest they pay! Fabulous program!
Bridge Loans – are typically 5.99% with limited fees – But they get you where you need to go!
Interest rates are subject to change without notice! Above are LA County Loan Limits.
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