You can use a mortgage calculator to calculate your credit power in a bank and they will tell you exactly what you can afford. The bank uses a formula that you may have heard about, called the debt-to-income ratio. Basically, they take all your bills and combine them with your income to get a percentage of how much you spend and how much you can pay. It is useful to know if you want to rent or buy, because it tells you how much you can pay for a monthly payment. The rent and the purchase are pretty close when it comes to the size of your monthly payment. The difference lies in the down payment, the more difficult credit checks and the property values in the sale. The rent is definitely a little cheaper, easier and faster in most cases, so if you need something now and know it will be short term, then the rent is for you.
The director is very easy to decipher with the help of a rent vs buy calculator that shows a depreciation schedule. It shows how much capital and interest for each monthly payment. Keep in mind that the initial amount is very low at the beginning, because you still owe a lot of money. As you owe less, you pay less interest, so it is important to pay the amount of capital. If you decide to buy, try adding a little to the main amount each month so you do not have to pay so many percent.
Suppose you can rent for $ 1,000 a month or buy an apartment for $ 150,000 and pay $ 1,350 a month. 1300 includes:
Monthly mortgage payment – $ 850.00
Taxes / Insurance – $ 300.00
Apartment rate – $ 200.00
All there is basically the same as the rent, except that you did not need a down payment or 2 months of work to buy a house first. If you look at the depreciation schedule, you will see that the amount of capital during the first year is approximately $ 165 per month. This is your only savings compared to rent. Therefore, in this 3-year case, you will spend an additional $ 185 / month, buying instead of renting. After 3 years for an amount of US $ 6,660.00 PLUS, you must sell the apartment with the payment of real estate and the transfer of property rights.
Each person has a different situation, and they always require different paths. There is no better or worse idea, just get the best out of what you want or need to do. He also uses the rent vs buy calculator well, because he can tell you a lot!