According to Rent Jungle, the average rent for a two-bedroom apartment in Portland is $1821 per month. The monthly mortgage payment on a $300k home purchased with five percent down falls within the same monthly payment range. By the time you factor in the tax savings associated with the mortgage interest deduction, the net monthly payment may be even less than renting.*
What factors need to be considered?
- Credit: A buyer’s credit score determines both the interest rate on a mortgage and what types of loans are best
- Loan options:
- Conventional loans with 20 percent down typically have the lowest interest rates
- Conventional loans with three to five percent down are good for borrowers with solid credit and limited down payment
- FHA loans with 3.5 percent down are a good option for borrowers with moderate credit and limited down payment
A gift from a family member can be used to cover all or part of the down payment on any of the loan options above
- Tax benefits: Homeowners can deduct the mortgage interest they pay each year from their taxable income*
- The Mortgage Credit Certificate (MCC): This program is for first-time buyers that meet income requirements (listed above) and buy within the city limits of Portland. An MCC provides a direct tax credit** for 20 percent of the interest that buyers pay on their mortgage each year. Savings can be in the range of hundreds of dollars per month.*
- Appreciation: According to the U.S. Census Bureau, the Oregon housing market has averaged over 6 percent appreciation per year for the period 1950 to 2005. Since rent and mortgage payments are similar, the appreciation of a home is all deferred gains that can be realized at the time of sale or refinancing
Do you know anyone who is renting? Have them give me a call to discuss the possibilities of buying a home!
*Peak Mortgage NE Portland is not a tax consultation firm. Please seek advice from a tax professional.
**This is not a commitment to lend. Prices and guidelines are subject to change without notice. Some products may not be available in all states. Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision.
©2018 A division of Finance of America Mortgage LLC | Equal Housing Lender | NMLS 1071 | AZ BK 0910184 | Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act.