The question plaguing every Northern Virginia tenant who wants a home of their own is whether it is more beneficial to continue renting, or to purchase a home of their own. The Fairfax, Virginia real estate prices look great, and the interest rates are still attractive. But what factors should you consider before taking the plunge?
First, consider the value of the homes in the Northern Virginia neighborhood where you are interested in purchasing a home. The combination of good prices and low mortgage rates make it considerably cheaper to own than rent in most markets. Assuming a buyer is qualified with a down payment and won’t be moving for several years, there may not be a better time to purchase your Fairfax, Virginia home.
In the example below, the total house payment is $1,281.01 compared to $1,500 to rent the same home. Before you even take into consideration the financial benefits attached to home ownership, it’s already less expensive to own than to rent.
The net cost of housing falls to $764, which is more than half the house payment when you take into account the principal reduction due to amortization, a modest appreciation and the tax savings, along with a reasonable maintenance expense that a tenant would not have to pay.
One of the biggest benefits to owning a home is the growing equity. As the value goes is going up through the years, the unpaid balance is also declining. A favorable leverage causes a low down payment to grow to $40,609 in a short seven years based on a modest 1% appreciation.
There’s an expression often heard in the real estate industry: “Whether you rent or buy, you pay for the house you occupy.” You’re either buying it for yourself or you’re helping your landlord buy it. There are plenty of great homes for sale in Fairfax, Va that you can choose from to start building real estate wealth for yourself.
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