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Q410: I’m a 70% disabled veteran living in Dallas, Texas. I was just approved for a VA backed home loan. At the moment I am renting a house. I pay no HOA fees, no property taxes, no home insurance, and no maintenance to keep the place up. All is paid by the owner. The way I see it when I consider the cost of paying for a house it is very expensive. Am I better off renting and pocketing what I will save or buying a house? Even when my tax exemptions kick in it still more expensive to pay for a house. Do I see this right?
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A1: I always feel it comes down to what makes you financially comfortable. I think its the right answer when it comes to expenses, but if you always wanted a house your mortgage payment could be cheaper than your rent payments. For sure there are always other expenses buy a house, like house insurance, taxes, maintenance cost, buying stuff at Home Depot like lawn tracker, tools, gardening stuff, etc. and this cost money even if one time cost. You never know what kind of neighbors you can have and if they are bad and disrespectful you stuck and costly to move away from them. For myself, I am renting and they replaced a new air conditioner(costing me $58 a month) and no crime here. neighbors come and go and if there are issues Property Mngt gets them out of here fairly quickly. I am looking at buying next year but have not been unhappy staying where I am. So if you always wanted to buy a house, then do it, If you're financially happy where you are I would stay and enjoy your money going on vacation. Just my 2 cents my friend. (AM) 5/8/20
A2: Your right as far as repairs but if buying a home you get tax breaks on the interest you pay in your mortgage payments. Secondly you can make changes to your place without getting permission from the owner which will be you. It is an investment what will in most instances increase in value over the years and can be sold if your health gets so bad you can no longer keep it up. If you die then who ever you will it to and in what form can keep it or sell it instead. For life insurance policies you pay more than you gain and really have nothing in return unless it is whole life. Be careful about buying a Foreclosure home from Fannie Mae for we did and there has been one thing after another that they hid from us such as ant infestation, broken well line to house for contractor dumped big rocks right on top of it, spindle jacks under the house rusted out, stolen heat pump and sump pump. They had a contractor install a sump pump plugged into outside outlet that has no power to it but when had heat pump put in they plugged it into one of the outlets the heat pump used so works fine. Had to did a swale around most of the house with a french drain to lower or stop the water accumilating under the house during the winter. Soil content mostly clay so does not drain or seep in properly. All and more of these things take into consideration before signing the loan paperwork. I hope this helps with your decision and best of luck in your choice. (JM) 5/8/20
A3: Actually, you ARE paying al or part of those costs - they are factored into your rent payment. So the question is - will it cost you more to purchase and live in a similar house than it dies to rent your current space? If yes, you may be better off staying where you are. (DJ) 5/8/20
A4: You get more for your money living in smaller town than Dallas. First pray about then wait. Psalms 46:10 . (MH) 5/8/20
A5: Home ownership is not for everyone. It sounds like you are more comfortable with your current situation. With today's tax structure it isn't as beneficial to own rather than rent, at least in my case. But I do own as was my decision. If your rent is not more than the cost of a mortgage, taxes, and insurance, then you'll do no worse than break even but if your rent is high, you might still save by buying versus renting. In my case buying was a little over a thousand dollars a year cheaper than renting. Another factor in your decision is housing availability where you live. If apartments are plentiful then rents will be lower. Where I live there are never enough apartments and rents are higher, making home ownership more attractive. Talk to a Realtor. They can help. (TM) 5/8/20
A6: You are paying for all the things you think you are not paying. The Landlord may write the actual check but the $$$ must come from somewhere, guess where? (HB) 5/8/20
A7: I suggest you consult with a financial advisor. VSOs with Veterans Service Organizations assist in filing claims for compensation.. We are not financial advisors. (GH) 5/8/20
A8: You believe that you are not paying those costs, but the one who rents you does pay them and charges you in rent. (AMP) 5/8/20
A9: It depends on what your total income is. You don't want to over extend yourself. Right now your rent payment is actually paying the prop tax and HOA and maintenance. If you get a good low interest rate loan (should be 2.875% to 3.125%) with little lender fees then you could be ahead of the game if you live in an appreciating neighborhood. Your VA loan will never go up but your rent will as property values increase and the land lord can justify getting more monthly income from his property/investment. Make a comparison of the monthly costs both ways and you'll see you'll most likely be better off buying in the long run. Good luck. (JC) 5/8/20
A10: If you can afford a house with all the expenses associated with homeownership, yes. At the end of a 30 year mortgage you will own the home. Example - if you purchased a home for $100,000.00 and lived in it for 10 years - and sold it for $100,000.00 - you essentially lived rent free. (MB) 5/8/20
A11: At your age I would recommend keep renting. There are alot of cost to maintaining a home and at your age you are not going to build much equity. (LB) 5/8/20