I have discussed in a previous blog about the opportunities to buy your own building, but here I would like to discuss the opportunity to buy a home. Renting is usually where most people start and Las Vegas is no exception. The good new is; however, that the home market in Las Vegas is still affordable. If you are thinking about transitioning from being a renter to a homeowner, remember to find a good realtor and get your lending in place to find out what you can afford.
Let’s create some examples to paint a clearer picture of homeownership. Let’s say that you are currently renting a 2500 square foot home and you are paying $1900 per month for that rental. If you are comfortable with that payment, what can $1900 get you as far as purchasing a home including taxes and insurance? What would your down payment look like?
When you are leaving your rental one morning you see a For Sale sign right across the street and it is a model match. You decide to get out and take a flyer. It has a listing price of $295,000, so you are curious to find out what that looks like financially. At that price point you could do an FHA loan, which would be 3.5% down so approximately $10,000 for a down payment. The loan for the remaining $285,000 at a competitive rate would give you a monthly payment of about $1300 per month. You would then need to add in taxes and insurance of about $200 per month. So, let’s recap…
Rental $1900 per month
Own $1300 per month + $200 taxes and insurance for a total of $1500
That is a savings of $400 per month. All of these numbers are approximates, but it gives you a good idea of the possibilities out there for you if you want to shift from a home renter to a homeowner. Now if you are in Silicon Valley or New York this may not be a possibility, but here in Las Vegas, home prices are still very reasonable.
As we have discussed before there are many things that need to be considered. A good realtor will help you locate, search, and find a home for you. They will also help you understand the value and what your offer should be on the home. Make sure your lender gets you pre-approved before you shop, so you know exactly what you qualify for. Get a pre-qual letter from your lender, so your realtor can share that with the sellers to make them feel comfortable that you qualify. Home ownership can be very rewarding, so make sure you have all your ducks in a row to improve your chances for a smooth purchase process.
Please leave a comment or contact me with questions.