Mortgage loan interest rates are at all-time lows and many renters are now wondering if they shouldn’t be putting the money they spend each month for rent into a home loan instead. FHA loans are every bit as competitive as conventional loans when it comes to interest rates and terms–and the down payment requirements on FHA mortgages is far less than many conventional mortgages.
But the question remains–should you buy or rent?
This is such a common dilemma that the FHA/HUD official site addresses it specifically, linking to the government Ginnie Mae home loan calculator to help borrowers see what their rent dollars could be doing in a mortgage loan instead.
Using a mortgage calculator can be as simple as taking the amount you pay in rent, and comparing it to the costs of an FHA mortgage. You’ll need the amount you’d like to borrow, a possible or projected interest rate, the down payment and a few other basic figures. Once you’ve plugged these numbers in to the buy-versus-rent calculator you’ll get a very good idea of how your dollars could be used for an FHA mortgage compared to what you’re spending now on your lease.
You can find the Ginnie Mae calculator at http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH
Again, this calculator is linked to and provided by the government to help borrowers make informed choices; for an actual FHA loan application you will need to speak with a participating loan officer as the FHA itself does not lend money. If you are interested by the numbers you see after using the calculator, you can pre-qualify for a FHA mortgage loan at http://www.fhaloan.com/, which is a private company and not a government website.
A rent-versus-buy mortgage calculator is the first step for many on the path to home ownership. What will you learn after using the calculator?