Buying vs. Renting
If you’re still renting because you don’t think you can afford to buy, try this:
Take your current rent and multiply that by 12 (months in a year). Then take that number and multiply that by 30 (number of years for a typical mortgage). If the result is greater than the average price of homes in your area, you can afford to buy!
By the way, the median home price in King County last year (2009) was $380,000. The median price in Snohomish County was $299,950.
When to Buy?
This is a GREAT time for buyers. Home prices are down, and interest rates are still at or near record lows. This makes now an affordable time to enter the market.
The Investment
Build up your equity. Don’t pay rent and help your landlord build up his equity. Homeowner tax advantages include interest and property tax deductions. Payments to principal put money back in your pocket. Money spent on rent is just gone.
The Dream
Start small. Your first house may not be your dream home, but smaller houses typically appreciate considerably faster — about 20% – than larger ones. It’s an advantage to become a homeowner sooner rather than later.
| Rent for | Example of Savings | Buy For |
| 5% interest/30 year loan | $350K | |
| Loan (P&I Payments) | $1879 | |
| Taxes & Insurance | $325 | |
| $1500 | Rent | N/A |
| $1500 | Monthly Payment | $2204 |
| Monthly Interest | $1458 | |
| Property tax | $275 | |
| Monthly deductible | $1733 | |
| X.32% | Tax rate | X.32% |
| Monthly Tax savings | $485 | |
| $1500 | Monthly payments | $2204 |
| Less Tax savings | $485 | |
| Less Principal reduction | $421 | |
| $1500 | Now Compare | $1298 |
At your service!
Lynette Hensley
Associate Broker