As a mortgage loan officer, one of the most common questions I receive from clients is whether they should buy or rent a home. It’s a crucial decision, especially in areas like South El Monte, California, where the real estate market is dynamic, and home values are steadily increasing. Today, let’s explore a practical comparison of buying versus renting a $799,000 home in South El Monte, using a 95% conventional financing option.
South El Monte is projected to see a 6.25% annual appreciation over the next nine years. This appreciation rate is a significant factor when weighing the long-term benefits of homeownership.
When you buy a home, your monthly mortgage payment will include principal, interest, property taxes, and homeowners insurance. Here's an estimated breakdown:
Over the first nine years, you will have paid approximately:
One of the key advantages of buying a home is building equity. With a 6.25% annual appreciation, your $799,000 home is projected to increase in value over the next nine years significantly:
During this period, your mortgage balance will decrease as you pay down the principal, and the equity you’ve built will be substantial.
If you choose to rent instead, your monthly rent will likely increase annually due to inflation and market demand. Assuming an initial rent of $3,500 per month with a 3% annual increase, here’s what renting could look like over nine years:
Now, let’s compare the two options after nine years:
Buying:
Renting:
In South El Monte, with a projected 6.25% annual appreciation, buying a home could be a financially savvy decision if you plan to stay in the property for the long term. After nine years, the equity you build, combined with the potential increase in property value, makes homeownership a compelling option compared to renting.
However, personal circumstances, financial goals, and market conditions should also be considered. If you’re ready to explore your options further, I’m here to help you navigate the mortgage process and make the best decision for your future.
David Delgado
NMLS# 349079 • Freedom Choice Lending
Office: (562) 281-6163
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The terms are based on 6.379% APR.
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