Rent Increases? Deciding Whether the Time Is Right to Buy a Home
Renting is a viable option for those just starting out and for people whose jobs require them to travel. For long time residents of neighborhoods in the city, renting an apartment may be deemed more practical than paying the big ticket prices often associated with the area market, particularly if they are in a rent controlled unit. However, recent increases in the Bronx area on these leases may mean it is time for you and your family to look into making a real estate purchase. The following are factors to consider when making this decision, along with tips to help you be better prepared.
Benefits of Buying Versus Renting
A June 26, 2018 report in the New York Times announced new increases among rent controlled units in the Bronx had been approved. The Rent Guidelines Board voted to increase rent stabilized unit rates on one year leases by 1.5 percent, while two year leases will increase by 2.5 percent. While these may seem modest amounts, particularly when given the Board’s past history, they are the steepest increases since 2013 and elicited angry reactions among local residents.
These types of changes can prompt renters to reconsider their options, particularly when it comes to home ownership. While buying a house is a major investment, Zillow points out the following benefits:
- The ability to do what you want with the property. While you will not be able to count on a landlord for repairs, you can make home improvements and changes as you wish.
- You get a return on your investment. Rather than paying money for property you will never own, you could be investing in something that could eventually net you a profit.
- There are tax benefits. Homeowners, especially first time ones, may be able to take significant credits on their tax returns.
- No more rent increases. Rather than seeing your rent continue to rise over the years, your mortgage will remain at the same amount.
Preparing to Buy a Home
Buying a home is a major process, and requires some advance preparations on your part. If you are considering it as an option rather than continuing to pay rising rental costs, BankRate offers these tips to help you prepare:
- Work on your credit score. If you currently have credit card or personal loan debts, begin paying down these amounts. If you do not have credit, establish it by taking out a loan and paying on it regularly. The better your credit score, the lower your interest rate.
- Decide what you can afford. To qualify for an FHA loan, your mortgage payment should not be more than 30 percent of your income.
- Begin saving. The larger the amount of your down payment, the lower your monthly payments. You will also need to cover closing costs and other last minute expenses.
Contact Us Today for Help
Questions about the home buying process? Contact our New York real estate attorneys and request a consultation in our Bronx or Westchester office to see how Cavallo & Cavallo can help.