4 ms·

As someone that has been exploring real estate for the first time, after speaking with some people it seems that mortgages have generally been less expensive th

As someone that has been exploring real estate for the first time, after speaking with some people it seems that mortgages have generally been less expensive than rent? Good luck finding something like that with today's prices and interest rates.

freeone3000 4y ago
If this isn't true for your area, the general advice is to wait a few years. Your mortgage payments are locked in, rent increases year-over-year at single- or double-digit percents.
- unethical_ban 4y ago
  Mortgages can be refinanced at a lower rate when the market allows, correct?
  - bombcar 4y ago
    Correct, however there are costs associated with refinancing (either "built in" or upfront) and in some cases the refinanced loan has fewer protections. For example, a purchase loan in California is non-recourse, but a refinance is not. However, you can get "trapped" as I did if you bought near a high point, and then interest rates and prices dropped, and since I was now "underwater" I couldn't refinance, even though I was perfectly capable and did continue to pay on the original loan. Eventually the property appraised high enough to refinance again.
    - toast0 4y ago
      > For example, a purchase loan in California is non-recourse, but a refinance is not. That's not the case for refinances after Jan 1, 2013.
      - bombcar 4y ago
        Good to know! https://www.bankruptcysoapbox.com/california-extends-protection-for-home-loan-borrowers/ https://www.bankruptcysoapbox.com/california-extends-protect...
  - bluGill 4y ago
    IF/WHEN the market allows. There is no particular reason to believe rates will go down again. They might, they might not. Historically todays rates are around the normal low.
randomdata 4y ago
Rent has skyrocketed recently, largely because people are afraid to buy houses right now, thus more demand for rental units. A mortgage may still be cheaper if you can stomach the reality that you might quickly end up underwater. That said, if you have rent control locked in, the choice is likely easy.
- friedman23 4y ago
  My comment is saying rents are cheaper not mortgages.
rufus_foreman 4y ago
>> it seems that mortgages have generally been less expensive than rent? This is very location-dependent. In some cities it is true, it some it isn't, in some it depends on the segment of the market.

freeone3000 4y ago

If this isn't true for your area, the general advice is to wait a few years. Your mortgage payments are locked in, rent increases year-over-year at single- or double-digit percents.

unethical_ban 4y ago
Mortgages can be refinanced at a lower rate when the market allows, correct?
- bombcar 4y ago
  Correct, however there are costs associated with refinancing (either "built in" or upfront) and in some cases the refinanced loan has fewer protections. For example, a purchase loan in California is non-recourse, but a refinance is not. However, you can get "trapped" as I did if you bought near a high point, and then interest rates and prices dropped, and since I was now "underwater" I couldn't refinance, even though I was perfectly capable and did continue to pay on the original loan. Eventually the property appraised high enough to refinance again.
  - toast0 4y ago
    > For example, a purchase loan in California is non-recourse, but a refinance is not. That's not the case for refinances after Jan 1, 2013.
    - bombcar 4y ago
      Good to know! https://www.bankruptcysoapbox.com/california-extends-protection-for-home-loan-borrowers/ https://www.bankruptcysoapbox.com/california-extends-protect...
- bluGill 4y ago
  IF/WHEN the market allows. There is no particular reason to believe rates will go down again. They might, they might not. Historically todays rates are around the normal low.

randomdata 4y ago

Rent has skyrocketed recently, largely because people are afraid to buy houses right now, thus more demand for rental units. A mortgage may still be cheaper if you can stomach the reality that you might quickly end up underwater. That said, if you have rent control locked in, the choice is likely easy.

friedman23 4y ago
My comment is saying rents are cheaper not mortgages.

rufus_foreman 4y ago

>> it seems that mortgages have generally been less expensive than rent? This is very location-dependent. In some cities it is true, it some it isn't, in some it depends on the segment of the market.