If you are moving to the Fort Hood area one of the first questions a lot of people ask themselves is should they rent or should they buy when they get here? With interest rates still at an all time low, sometimes your monthly mortgage payment will be less and you get more home than if you where renting. But monthly payment should not be the only deciding factor!
Before you step into the realm of homeownership the first question you should ask yourself is how long I'm I going to be here? If you are active duty military, then you know that, moving is just part of the life of a soldier. So if you know that you are not going to be stationed here 3 to 5 years of more, then you really need to consider your options.
The first option is that renting may be your best option. If you rent then in a few years you do not have to worry about selling and possibly negative equity. Negative equity is where not enough time has passed for your home to appreciate in value to cover the amount of money will be required in order for you to be able to sell it. If you so not have enough equity then the difference will have to be made up by you writing a check for the difference and sometimes that can be a few thousand dollars.
The second option, and one that I think is the best right know for those wanting to purchase, is a 15 year of even a 20 year mortgage. With interest rates still at an all time low and home prices still affordable, it make sense to do a 15 or 20 year mortgage even if you are going to live here for 30 years or more. There are so many advantage, especially if you think you may meed to sell your home in 3 to 5 years. You will save thousands of dollars on interest rate fees, you will build up equity so much faster and you will have the house paid off in half the time of a traditional 30 year mortgage. And no your mortgage payment is not double of a 30 year mortgage.
If you borrow $100,000 at 3.5% a.p.r for 30 years, your monthly payment excluding taxes and insurance on a VA loan would be about $450. That same monthly payment on a 15 year loan with the same interest rate would be about $715, not $900, again that would only be your principle and interest.
Jose Segarra
Broker-Owner
Exit Homevets Realty
Killeen, Texas
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