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To buy or keep renting?

I currently pay rent $2200/2 bed +den for 1300 sq ft,(all utilities are additional) in the north suburb of Boston for family of 4. I may or may not relocate in 3-4 years. I don't have a down-payment saved and cannot do it because of how much I pay in rent. I will have to pay $6000 for private school for my son if I stay in this area vs moving to a neighborhood with good public school. Income is $150,000 gross per year. 
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May 30 2012 - US
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Replies (9)

I would encourage you to investigate owning a home.

If you happen to qualify for a VA loan you don't need to put any money down. FHA requires 3.5% down and the seller can contribute lots towards your closing cost.

Select a Realtor in your area (or the area you will like to consider living).
Explain you are not sure, but would like to see what is available and what cost are involved in becoming a home-owner. The cost for a mortgage just now is very low. Taxes and Insurance is another factor but your Realtor should cover that as well.

No cost to investigate this.....

Good Luck!
James Callas - Realtor® 
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May 30 2012
Profile picture for jrtpapa
I would encourage you to make an informed decision using the new york times rent-buy calculator http://www.nytimes.com/interactive/business/buy-rent-calculator.html

but remember it only captures the financial side of things. also powerful is the psychological side. owning gives you the ability to do what you want, have pets, etc. renting gives you more flexibility for moving, and time away from chores.

and remember that there are numerous costs paid by homeowners that are not paid by renters. so the fact that you are not building equity is balanced against the savings in taxes, maintenance, insurance etc.

and remember that you only save money by deducting mortgage interest if you itemize your taxes
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May 31 2012
That is a lot of money in rent.I would not pay it, taking the write off makes more sense, however.....
 I have clients who just purchased in Boston. It made economic sense to them. Consider sitting down with a lender and letting them take a look at your financials (rather than posting them here on this very public forum)
Whatever your decision best of luck to you.
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May 31 2012
I will say renting is not the best option. but without any cash at hand seems hard to move forward.
Check your credit score and talk to a lender broker to see what alternatives are there for your particular case.
the best to you! 
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May 31 2012
Profile picture for the_country_hick
I would suggest you read the 2 links below.

"Does it make more sense to buy, or to rent? Here is the way to find out for sure."

"Why rent if you could buy for less money? Valid reasons inside."

Buying for less than 7 years will make breaking even in a flat market almost impossible. The selling costs are to high. Unless you can buy much cheaper than renting renting short term (under 7 years) usually is the cheaper alternative.
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May 31 2012
You should rent.

You're making $12,000 a month, it's not the rent that's killing you, it's the rest of your expenses - whatever they may be.

But you really should rent because buying is a commitment that you're not certain you want to make. If you want to invest in real estate, that's a different thing altogether.

All the best,
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May 31 2012
Without a doubt - BUY - if you can - use a good lender - my daughter recently moved to Boston and we were stunned at the rental prices but when she totally qualified them for a loan the same house costing $2400/2600 a month would only cost them around 1800 a month with a mortgage - interest rates are brilliant - and not in a bad area either - the bonus in your area at the moment (and it would appear that it has been that way forever) is that whatever your mortgage payments, you will get more than your mortgage payment, if you ever rent it out - real estate is a long term investment - part of your retirementy port folio - in my personal opinion - the stock market jumps up and down like a monkey but real estate takes the occassional 10/12/15 year dive and then rebuilds itself.  Our economy is built about real estate - think long and hard and make the right decision for yourself.  Good luck
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May 31 2012
Any financial planner would advise you to buy and to stop throwing your money away every month without any tax benefit or appreciation or building of equity. However, many people's situations may cause exceptions to the rule.
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June 03 2012
Profile picture for wetdawgs
The answer is obvious and unfortunately most agents missed it. Unless you are qualified for a zero % down loan (VA loan specifically as Boston metro area is not USDA eligible),    no matter how much any one can argue the financial benefits of buy vs rent, if you don't have the down payment saved, you aren't ready to buy.     If every month has every last penny spent, then home ownership will also be tough because things happen.  Furnaces need replacing, roofs leak, and they all cost money and that all needs to go into your budget.  

So, put together a plan to get that down payment.   It isn't easy for many of us, but it can be done if you come up with a strategy and chose to stick to the strategy.  

Good luck!   

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June 03 2012
 
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