house, cookieAs a Realtor® who sells in Orange County and a resident of the Whittier area who loves, loves, loves it here, I am interested in the recent debate on whether renting a home vs. buying one makes more sense. Traditionally, rents run 44% less than mortgage payments, but have stayed below 40% since April, 2009. Even after other homeowner expenses and tax credit credits are figured in, the gap is narrowing even more, according to John Lansner of the Orange County Register. Should this make you stretch and buy a home?

Whether you should buy is a personal decision, of course. Given the ratio of rent to mortgage, you might pay $1,400 to rent and $2,100 to buy - still a sizeable difference. If your income is not steady or not sufficient, or if your credit is weak, you may not be able to span the gap. As noted in our last blog Lender's Math Is What Counts For Loan Approval, you will pay higher interest and have a higher payment if your credit score is lower. The gap will be wider between the cost to buy vs. rent until you get your score higher.

If you qualify for a mortgage and can afford the payments, let's look at the facts of homeownership in our area. House prices in Orange County are at a median of $425,000 down from $645,000 in 2007. Whatever the buyer pays for their mortgage, it is less than in the past, due to the falling prices combined with low interest rates. You have the potential of obtaining a great property at a "discounted" rate to serve a couple purposes.

Your new Orange County home will provide a stable residence for your family in an area where, historically, people have been willing to pay more to live. The climate, the usually vibrant economy, the high wages have made people want to pay a premium to live here. This history bodes well for buyers who believe that homeownership will shelter their family now and preserve their investment, even without the inflation of the past. The market will recover, and I believe Orange County will come out a winner.

Recent events may have overturned the scenario where a home is a fast-growing cash cow. However, a recent survey by the Pew Research Center reaffirmed that 81 % of adults felt that buying was the best longer term investment to make. Even among those who had lost money on their homes with sinking values, 37% strongly agree and 45% somewhat agree with this. Among renters, 81% aim to buy when they can. Home ownership is a goal you might share too.

By buying now, you will stop the flow of "wasted" rent dollars and eventually own something, or a piece of something if you sell before your mortgage is paid off. This assumes that housing prices will not continue their past free fall. Long term, your home will be a decent investment that offers shelter and some profit.

If you think you are ready to buy a home in Orange County, give me a call. I can open a world of affordable choices to you, right here in La Habra, Whittier, La Habra Heights, and the surrounding area. I will be happy to discuss the pros and cons of owning vs. renting in your personal situation. Keep in mind that your circumstances may dictate what is affordable for you, and I will work with you within your price range.

For some interesting insights on the housing market, I welcome you to listen to my interview on the House Calls Radio show, conducted by loan officer Carlos Dandridge on area stations AM 830, 920, 1310, and 1510.

 

Courtesy of Linda and Tim Domis, Neighborhood Specialists

How much is your home worth?  http://www.homevalueslahabra1.com/

Contact Linda and Tim at:

http://www.whittierhomes.com

http://www.lahabrahomesonline.com

http://www.lakeparkbrea.com

http://www.lakeparklahabra.com

Email the Domis team at linda@lindadomis.com

Listen to my interview on the House Calls Radio show, conducted by loan officer Carlos Dandridge on area stations AM 830, 920, 1310, and 1510. 

La Habra Real Estate la habra homes for sale mortgages credit score