Rents are going up, and it's a problem for millions of renters. If you're feeling the pinch from higher rents every dollar must go towards your living situation which means less savings or investment capabilities as well as not being able to build on that net worth any time soon.
The good news is there might be hope - buying property could help solve this issue because even though prices may seem high now they'll come down eventually!
Compare your rent to a mortgage
Try comparing your rent to a mortgage. One way is to multiply your rent by 12 and then again by 25. Whatever that number is that is a good guide to a mortgage that you could probably afford right now. This of course doesn't take into account current interest rates or the amount of a down payment.
Interest rates are hovering around all time lows right now so it is a good idea to do the math.
For example, if your rent is $2000 per month, that is $24,000 per year and $600,000 over 25 years. So all things being the same, you could probably afford a $600,000 mortgage. Check with a Hawaii lending agent today to see.
Mortgages are cheaper than you might think
It's true that many first-time home buyers are convinced they can't afford to enter the market, but this thinking isn’t accurate. There are plenty of homes available for every budget and price range! In fact, location is what should worry us - not necessarily total cost or how much monthly mortgage payments might be on an expensive house because those things matter less in comparison with other important qualities like size/schools proximity .
Remember, when you buy a house you aren't just locking yourself into a rental contract. You are investing in a home and property have the potential to gain in value over time.
Something else to consider
Ok, with all that said there are other things to consider besides a mortgage. There are taxes, insurance, utilities and general maintenance fees that you'll have to pay. These must be taken into consideration too before purchasing your new home. On the plus side you'll be creating value in your home over time as long as you keep it in good health.
In closing, keep in mind that it is never too late to escape the rental trap. When you're ready to start building your future by investing in your first home, contact me. I'm happy to share beautiful local starter home options that will suit your needs and budget.