Don’t Take Local Real Estate Advice From National Sites

New Orleans Real Estate News

There is an article at CNN discussing the merits of buying vs renting in different parts of the country.  In some places, rental properties are in high demand, so the price of renting can be higher than the cost of owning.  In other places, not so much.  It’s some fairly good information about what you should consider when determining if it’s a good time for you to buy instead of renting.
Should you rent or buy?

The buy-rent calculation is just one part of the decision-making process. Other factors include:

  • How long you plan to stay. If you’re not keeping the home for several years, transactional costs of buying and selling (e.g; commissions, closing costs) can wipe out any buying edge.
  • Whether you have cash for closing. It’s not easy to find banks willing to lend more than 80% of the cost of a home. That means buyers have to come up with 20% down, plus closing costs. On a $200,000 home, that’s $40,000.
  • Whether you can cover all the homeownership costs. It’s not just the mortgage: There are property taxes, insurance, heat, utilities and regular maintenance.
  • Whether you can claim the tax advantages of homeownership. Mortgage interest is deductible and can shave a lot off tax bills but this benefit accrues mostly to high income earners with substantial mortgage payments. Many borrowers claim the standard deduction on their taxes and so derive no savings from the deduction.….Read the entire CNN post

Here’s my issue with their advice on cash for closing…”it’s not easy to find banks willing to lend more than 80% of the cost of a home”….

NOT TRUE!  This might be the case in some of the luxury areas where prices are above the FHA loan limits, but the average home in New Orleans and the surrounding areas is selling for well under those limits and you can buy with 3.5% down, not the 20% noted in the article.  This is especially important for people relocating to New Orleans from areas with a completely different real estate climate.

Before you decide to buy or rent, take the time to talk to a local lender and find out what the real cost of owning in New Orleans would be….don’t rely on the national news to give you local information.

 

 

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