I hope renters are saving

I was thinking about people who are renting right now and hope they are saving tons each month.  Let say a hard working couple makes about 5k a month.  I know some make way more and some make way less.  What if people who are renting that pay about 1k in rent a month and try save about 2K a month for a down payment on a house.  They will still have about 2k to pay other bills as well.  They are going to have a pretty good down payment in the future.  If they do it for a year they will have 24k saved up where as if they were in a house with a 2k mortgage they would be losing money since the Real Estate market is not so hot.  I think it is a pretty good idea to save as much as possible so when it comes time to buy a house you put enough down to actually have a affordable payment versus all these people out there that have thousands of dollar mortgages. 

I know that seems like alot but a thought if people were not spending like crazy and actually saving this could be possible.

Just a thought I had…

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One thought on “I hope renters are saving

  1. Sandy February 5, 2008 / 8:45 pm

    I think renting is great. You don’t have a yard to take care of, other people clean the pool for you, when your microwave breaks you call the maintenace staff and they’ll replace it for you for free. Plus, since apartments and condos are usually smaller than houses, you save on heating, AC, electricity, gas, and so on. There are inconveniences such as not having a garage, or getting stuck with a noisy person above you. But overall I think the pros of renting far surpass the cons.

    And you’re right. The best thing to do when you go to buy a house is to put down as much cash as possible. This will reduce the amount of money you have to borrow (and therefore reduce the amount of interest you pay). Plus, if you put down a certain amount you won’t have to pay PMI (private mortgage insurance) which can easily cost you up to a couple of hundred dollars a month. Another benefit to putting down cash toward the purchase of your home is that you can lock in your interest rate with a 30-year or 15-year fixed mortgage. Those loans are hard to get when you finance 100% of your house.

    When you go to buy a home, educate yourself! If you don’t understand the different types of mortgages, or what points are or that kind of stuff, research it. Buying a house is probably the biggest purchase you’ll ever make and you want to be SMART about it.

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