Is it better to rent or buy right now?
$190,000 3 bed, 2 bath, 1580 sq feet
This one is in a great neighborhood, with a great elementary school, but a TOTAL fixer upper.
3 bed, 2 bath, 1085 sq. feet $189,000
This one is in our current neighborhood and is pretty much the norm. Dallas is just soooo expensive, it is out of control. We looked at one house that was 890 sq. feet for $179,000. That is pure craziness.
The American dream tells us that we should own a house. Before we found our new rent house, we debated whether or not this was the right choice for us. Would it be better for us to continue to rent for now, or buy a house? We’ve looked at houses, looked at our options, and decided that for now, it is better for us to rent.
We want to save up a 20% down payment, so that we don’t have to pay P.M.I., and because that’s what Dave Ramsey recommends. Well actually he recommends paying cash for a house, but that is unfortunately unrealistic for us. If you can’t do that, Dave recommends paying 20% and doing a 15 year fixed rate mortgage, and then pay it off early. The interest you pay on a 30 year mortgage is seriously out of control. I’m excited that we are taking it slow and waiting for the right time, but I’m impatient. I want to have my own house and decorate it to my taste! Other factors for us include:
We don’t know how long we want to live here. Don’t get me wrong, we like it here, we just don’t know what the Lord has for us long term.
We don’t want to use our emergency fund for a down payment.
Dallas real estate prices haven’t really gone down at all, and are still really crazy high (in my opinion).
Want to find out if you should rent or buy?
The calculator above is pretty useful.
For discussion: Do you rent or own?
If you own, what made you take the plunge?
Is there anything you wish you had done differently?
We bought our home right before the big housing boom and got a steal on it. (It was part of a divorce settlement)I do like that there isn’t any random visits from a landlord. But on the other hand, all of the repairs, taxes, insurance, etc. are our responsibility. Hang in there and you’ll know when the time is right.
The American dream has led a ton of people into debt and foreclosure. Forget appreciation, the big question is, can you rent the same type home for less each month than your mortgage would be each month? If so, RENT!
We own, but we lived with our parents for a long time so we could save up a ton of cash 🙂 We live near Wylie and built a house, I’m not sure where in Dallas you live, but those prices for the square footage is crazy! There are definitely cheaper areas around. The best advice is to ONLY get what you can afford like the previous person said, soooo many people are in debt trying to live out of their means! Good luck!
We rent a nice house (for Cancun standards) for $360 US dollars a month. We want to buy eventually, but we wouldn’t consider it without a very large down payment saved up.
Luckily, we’re not sure where we’ll end up in a few years, so we don’t mind waiting while we save.
we’re renting…but SO want to be home owners. The west coast is notoriously known for ridiculous home prices…but we’re hoping sometime in the near future we’ll find something!
Wait until it is right. You will know it.
Good question! I live in MI so our housing market is in the bottom of a garbage can right now. We bought our house 11 years ago – it was an affordable house {read: SMALL!} but we didn’t buy something we couldn’t afford…even though we were pre-approved for 3X’s the amount we spent. Fast forward to today – many of our neighbors, friends, and some family had to walk away from their mini-mansions while we’ve survived – even with me quitting my job to stay home with the kids. It’s hard watching other families go through this difficult time – but we lived by the mantra that we only pay cash and only buy what we can afford. Honestly we had to cut back some, but we still go on vacations and we are thinking about buying a second (even smaller!) vacation cottage. You will know what the right decision is…just don’t rush into anything if you are unsure 🙂
We own, and we’ve been in our house 9 years this spring. We stretched ourselves to buy our house because we didn’t want to deal with a starter home. Luckily things worked out, our careers took off and life is good. I actually bought my first condo in Chicago at the age of 21 when I graduated college (my mom had to cosign) – had to work a weekend job for a few months to afford furniture, but you do what you gotta do. I was just taught to own instead of rent, and at the time renting was just as pricey in downtown Chicago as my mortgage payment.
Whatever you do, I highly recommend saving the 20% to put down and the 15 year mortgage. We started out with a 30 year, refinanced when rates dropped into a 15 year and are about 3-4 years away from paying it off. Every time I make a mortgage payment I salivate at the thought of not having that debt some day! The 15 year monthly payment is not that much higher than a 30 year. Ultimately the only thing I wish we had done differently was to start off with a 15 year but we would have refinanced anyway when rates dropped a few years ago. Rates are at an amazing low now.
One more thing and then I’ll stop – if you plan on children and if you plan on living in the home for a considerable amount of time, go for the better school district. I am glad we did because I have friends scrambling to sell and move to get into a better district.
OK…ONE MORE THING…you can always offer less than the asking price. You never know how desperately someone wants to sell. We bought our house when the market was booming and offered 30K less than asking – and it was a new construction. The agent thought we were nuts and almost refused to submit the offer. But ultimately the builder wanted to sell and we settled at 20K below his asking price.
PS…and I’m not trying to be bossy, just giving you my two…or four cents. Good luck! You sound like you have your head on right finance-wise.
In general I would avoid buying until you know you can stay for a long snap. People forget that houses, for the ordinary joe, are long term investments.
We own, though unloading what we own right now is a long shot and we would love a house instead of a condo.
I say buy when the time is right for YOU! Do get a 15 year loan and have at least 20% down. I’m surprise at the prices in Dallas…a bit pricey!
Blessings,
Linda