Minneapolis is the Worst City

THE WORST CITY????? FOR WHAT???? Renting.

Ask most of your friends who are renting right now or who had to find a rental recently. Rents are high and often difficult to find. Vacancy rates in the Twin cities are at an all time low so that means rental rates are at an all time high.

Trulia published a "Rent vs Buy" report for the summer of 2012. The monthly cost of home ownership int he Twin Cities was $751 and the monthly cost of renting was $1,558. Just so you don't have to get out your calculator; that is a whopping 52% more to rent than to buy. This is based on averages so each situation my be different but I could give you several individual examples. I had clients who sold their small home and bought a larger home on almost 2 acres with deeded access to a river. Their payment was less than their payment on the home in Fridley. Another client was paying $1200/month renting a two bedroom apartment. She purchased a single family home and her payment is $775/month which includes mortgage pa

yment, property tax and insurance. This doesn't even take into consideration her tax savings when she deducts her mortgage interest. It just makes financial sense to buy.

But let's put finances to the side for a moment. The decision to rent or to buy is very personal and depends on:
     1.  How long do you want to live in the home?
     2.  Can you qualify for a mortgage?
     3.  How much have you saved for a down payment?
     4.  Do you feel secure in your job?

If you are in the type of job which is transient and you expect to relocate in the relative near future it may not be a good idea to buy. You may have some credit issues and need a little time to clean up your credit report. You may have some money saved but don't believe it is enough. FHA offers mortgages at just 3.5% down payment. On a home costing $150,000 that is only $5,250. There are down payment assistance programs now which will help you come up with the down payment and there are some programs that allow your relative to gift you the cash for the down payment. If you have been thinking of buying a home it is well worth the trip to a mortgage consultant to discuss the different programs available. You will learn what your payment will be, how much you can qualify for and different programs available which will offer down payment assistance.

Interest rates are so low now it is well worth the effort to explore the possibility of buying a home. Talk to a Realtor. Talk to a loan broker. Test the waters and decide whether or not to take the plunge.