Over inside the Dollar Stretcher Community, there can be presently an interesting dialogue in progress about whether or not it makes extra sense to buy a home or hire one. This is a decision, of course, that consists of masses extra than without a doubt monetary factors. When Brian and I have been first married, we already knew?While not having any concept of which way the actual assets marketplace have become heading?That our largest monetary purpose was to buy a house, because of the reality (a) we every wanted a residence and backyard in preference to an apartment, and the rental market round right here is in maximum cases the latter, and (b) we each preferred an area of our very personal, one wherein we should knock down walls or update home windows or perform a little component we desired that could now not absolutely violate hearth codes, even as not having to reply to a landlord. However, we additionally tended to count on that buying a house could be a realistic lengthy-term funding?Not due to the fact we predicted with a view to sell it some years later for extra than we paid for it, but because each month's mortgage rate may deliver us only a little bit inside the direction of proudly owning the region outright. After 30 years of making loan payments?Or 15, or 10, or maybe a good deal much less if we paid down the fundamental aggressively?We'd have a home that turn out to be completely ours. After that, for the rest of our lives?Which is probably a few different 30 years, or 40, or maybe longer?We may never need to make a monthly charge again. (True, we might still need to pay belongings tax, renovation, and coverage, but a quick calculation showed us that this would in no way fee as masses consistent with month as hire.)
The downside of this, we figured, was that buying a home rather than renting would cost us more in the short term. We'd have not only a high up-front cost for the down payment but also a higher monthly payment throughout the term of the mortgage than we'd have if we continued to rent. However, it now appears that the second of these two assumptions may not have been accurate at all. Today, after reading on a Washington Post blog about how much home prices had risen in the past few months, I popped over to Zillow.com to see if our house's value had risen since the last time I checked it about six months ago. As it turns out, it hadn't (in fact, it had fallen, which I guess makes our neighborhood a contrarian one), but while I was there I made an interesting discovery. Along with its estimate (or "Zestimate") of overall value, Zillow provides a "Rent Zestimate" of how much it thinks a home could fetch in rent. And our Rent Zestimate turns out to be about $300 higher than our current monthly mortgage payment.
Isn't that something? Of course, Zillow's estimate may not be entirely accurate, but if it's even close, it means that we are actually paying less per month to buy this house than we'd pay to rent a similar one. Of course, this doesn't take into account the amount we ponied up for the down payment, but according to this calculator from the New York Times, that would pay for itself in just a few years. That makes "buy or rent," for us, a true no-brainer. We always figured that the benefits of home ownership would outweigh the downsides—but we never thought those benefits would include a lower monthly payment.
