Want to stop your rent from increasing? Buy a home.

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It’s no secret that rents, along with home prices, in the greater Seattle area have been trending higher. Rent Jungle reports that as of March 2015, the average rent for a 2 bedroom apartment within a 10 mile radius of Seattle is $1907. This is up 4% in the last six months.

When I teach home buyer classes, the number one reason why the students are looking to buy a home is because they are facing their rent being increased and they want more control over their monthly housing payment.

So if the average rent for a 2 bedroom apartment is $1907, how much home can that rental payment “buy”?  How much you qualify for will depend on how much down payment they have available and what mortgage payment they decide to use.

EDITORS NOTE: Rates posted below are EXPIRED! Click here for current rates for homes located in Washington.

Here are some examples based on current rates and programs, keeping the total mortgage payment (principal, interest, property taxes, mortgage insurance and home owners insurance) around $1907:

Conventional Home Advantage with Down Payment Assistance

  • Sales price: $300,000
  • Base loan amount: $288,600
  • Total payment: $1,918.03
  • Interest rate: 4.750 (apr 5.014%) priced with 0 points.
  • Down payment: $11,400
  • Estimated funds due at closing: $5,999.21 (includes down payment assistance of $11,630. DPA will eventually need to be paid back).

Conventional Home Advantage without Down Payment Assistance

  • Sales price: $325,000
  • Base loan amount: $312,650
  • Total payment:$1,911.76
  • Interest rate: 3.875% (apr 4.201%) priced with 1 point
  • Down payment: $12,350
  • Estimated funds due at closing: $21,850.59

FHA with 3.5% down payment:

  • Sales price: $310,000
  • Base loan amount: $299,150
  • Total payment: $1,949.79
  • Interest rate: 3.500% (apr 4.857%) priced with 0.468 points.
  • Down payment: $10,850
  • Estimated funds due at closing: $18,265.86

FHA with 3.5% down payment with NFH Grant Program:

  • Sales price: $300,000
  • Base loan amount: $289,500
  • Total payment: $2,058.58
  • Interest rate: 4.500% (apr 5.749%) priced with 1.5 points.
  • Down payment: $10,500
  • Estimated funds due at closing: $7,739.17 (includes a grant in the amount of $14,475. With a grant, funds are not paid back – it’s kind of like a gift).

Conventional with 5% down payment

  • Sales price: $310,000
  • Loan amount: $294,500
  • Total payment: $1,909.93
  • Interest rate: 3.875% (apr 4.428%) priced with 1.112 points.
  • Down payment: $15,500
  • Estimated funds due at closing: $25,406.34

Conventional with 10% down payment

  • Sales price: $350,000
  • Loan amount: $315,000
  • Total payment: $2,011.33
  • Interest rate: 3.875% (apr 4.257%) priced with 1.112 points.
  • Down payment: $35,000
  • Estimated funds due at closing: $45,416.91

Obviously, the more down payment you have available, the higher your sales price may be. It’s also important to note that none of the programs above require that you be a first time home buyer. All loans are using a 30 year fixed rate.

If your income meets guidelines,  you may consider using a mortgage credit certificate (MCC) to help increase your cash flow.  MCC and Home Advantage programs require that you take a home buyer education class sponsored by the Washington State Housing Finance Commission.

Rates quoted above are effective as of May 15, 2015 at 8:00 am and may change at any time. This is just a very small sample of programs and pricing that I have available. Rates quoted are subject to credit approval and are based on scores of 740 or higher and closing by June 22, 2015 or sooner. For your personal rate quote with current rates for homes located anywhere in Washington state, please click here.

Trackbacks

  1. […] Zumper has released their fall rental report revealing that Seattle has the 10th most expensive rents for a major city in the nation for one bedroom apartments.  Zumper reports that the average rent in September for a one bedroom in Seattle is $1600. That’s up 0.6% from the previous month and up a whopping 7.1% compared the last quarter. Zumper reports that a 2 bedroom apartment averaged $2200 for rent in Seattle. In May, I wrote about how a 2 bedroom in Seattle was averaging $1907 for rent. […]

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