Buying a Provo Utah Home or Renting
There are several good reasons why quite a number of people
should not buy a home. Below are a few reasons that show if you are
one of those people who should not buy but rather rent a home.
Buying or Renting a Home is a big decision.
Bad Credit Report
What’s your credit score? If Fair Isaac & Company or FICO gave
you a credit score under 620, you may not be able to get good
interest rate. Interest rates depend on your FICO score and a low
score may result in a high interest rate.
The higher FICO score you have the better interest rate you will
get on your loan. If you have bad credit you will need to work on
repairing it. You have to try to fix your bad credit first before
applying for a loan. Fixing your credit can take months or years. Be
familiar with your FICO score and what is needed to improve it. A
free credit report can be obtained online if you look around. You
should be familiar with you and your spouses credit report before
hiring a Realtor and starting to shop for a home. If you are
planning on buying a Provo Utah home you need to repair your credit
first.
Renting a Home in Provo Utah: Beware of High Debt Ratios
The two particular ratios that are being considered by lenders
loaning on homes in Provo, Utah are: front-end and back-end ratios.
The front end ratio consists of the mortgage payment, taxes and
insurance which will be divided by your salary monthly.
On the other hand, the back end ratio is the sum of your PITI
payment and your monthly debt payment and then to be divided by your
salary. If it goes up to 50% debt ratio, that is already very high.
It is important for you to know that a high debt ratio means that
you may not be able to qualify for a loan. If you want to buy a home
you may need to be careful before buying a brand new car and
accruing more debt. Debt is a bad thing. It is wise to keep out of
debt.
Buying a Provo Utah Home: Maintenance
Every home needs to be maintained and not everyone is willing to
deal with this kind of maintenance. In fact, those who are buying
homes for the very first time can’t afford to pay an expert or a
professional to fix the things that need to be done. You need to
allocate at least 5% of the total purchase price in order to cover
for repairs and maintenance when you are buying a new home.
Believe it or not it costs money to keep a home in good repair. If
you are use to renting you enjoyed calling the landlord every time
something broke. When you own your own home you are the one to do
the repairs. It is a good idea to try to do your own repairs if you
can. Calling a service tech every time you need to change a light
bulb can get expensive.
Renting a Home in Provo Costs Significantly Less
If buying a Provo home would mean that you have to pay a mortgage
payment that’s more than the amount of your monthly rent, it might
not be practical to push through buying a house in Provo UT.
Carefully consider whether to buy or rent a home. As of the
first quarter of 2012 it is significantly cheaper to buy a home and
get a mortgage compared to renting a home in Provo. In, fact I
just sold a family a home in Provo and their payment on a 1700 sq/ft
finished home was around $850. If they were to rent this same
home it would be $1,200. Here are a few other websites to
visit:
Buy a home in Orem Utah
Buy a home in
Pleasant Grove Utah
