Rent vs. Buy

Let’s consider a couple of scenarios based on the following known facts and assuming top tier credit scores. In Lodi between $160,000 and $180,000 there are 12 Active Listings (Short Sales not included) as of me sitting down to write this article. The Median of these homes are 3 Bed, 2 Bath and 1369 sq/ft for $167,900. Consider what you would pay in rents for this home, more than likely $1200-$1300 a month.

Scenario A:

Purchase price $167,900, 20% Down, Conventional Loan, Loan Amount $134,320, Interest rate 4.75%. Principal, Taxes, Insurance etc, puts your monthly payment at approximately $900.00.

Scenario B:

Purchase price $167,900, 3.5% Down, FHA Loan, Loan Amount $162,023, Interest rate 4.75%. Principal, Mortgage Insurance, Taxes, Insurance etc, puts your monthly payment at approximately $1200.00.