Are you having trouble choosing between buying a home or maneuvering the rental market? Here are the key numbers to consider!
Those three little numbers can play a big role in both buying a home and renting an apartment. According to Zillow’s analysis of over 25,000 loan quotes and purchase requests reveals that you need a score of 740 or above to get the best mortgage rates available. If you’re looking to rent, you can use your good credit partnered with a steady income as a negotiating tool.
As the job market is improving and the economy is on the rise, mortgage rates are increasing. According to Zillow the average mortgage rate is currently 4.29 percent for a 30-year fixed loan. With the rising rates, buying now ensures the low rates.
Total Cost of Ownership
For home-buyers, it’s best to allocate around 25 to 28 percent of your annual income towards paying for your home. Expenses to consider include mortgage payments, insurance, and taxes.
With climbing rental prices and vacancy rates dipping down to as low as 4.5 percent – according to Rentenna – it’s hot rental market with prices to match. It’s a general rule of thumb to use 15 to 50 percent of your total income. To keep your budget in check a 40-1 rule is a good rule to consider. For example if your rent is 2,400, your ideal annual income should be around $96,000 (40 x 2,400= 96,000).