Abberly at West Ashley Blog

Those who have never bought a home have likely heard the suggestion that renting is like throwing money away.

Why rent when you could buy? Well, there are good cases to be made for renting, depending on your circumstances.

Renting an apartment in Charleston means never having to worry about being trapped in an underwater mortgage, or making expensive repairs, and you can relocate when and where you want without worrying about selling a home.
 
Owning a home means a yard, the freedom to paint the walls whatever color you choose, and a chance to build equity and hopefully gain an asset that will grow in value. It looks like a good time to buy a home.

But for those who aren't certain they're going to live in a home they buy for many years, buying can turn out to be the avenue where your throw money away. There can be greater risks than with renting, but with greater risk, more headaches, and unforeseen expenses.
 
Keep in mind too, that your first home most likely won't have a state-of-the-art fitness center, gorgeous pool and other apartment amenities.

With a 30-year mortgage, more than two-thirds of the money spent on mortgage payments during the first five years will go toward interest, building little equity.

First-time homebuyers may not be aware of all the costs associated with ownership. Let's go one put some hard numbers on it.

• A homebuyer should assume the basic monthly expenses will add around 50% to 75% to the mortgage payment. Here's the math:
• The median price of a home sold in 2011 in Charleston, Berkeley and Dorchester counties was $186,050. So if a person puts down 10% and borrows the rest, with interest rates at 4%, the monthly payment on a 30-year loan would be about $800.
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• Add about $75 for private mortgage insurance.

That's $875 a month. Sounds pretty good. That works out to $9,592 yearly, with about $3,000 going toward paying down the loan, and the rest to interest.

Now here's a rundown of additional annual costs:

• Utilities: $2,700. That's electricity and water for an efficient, 1,800-square- foot house, with three occupants.
• Homeowners insurance: $2,200. The cost depends on proximity to the coast. Flood insurance is extra.
• Property taxes: About $750 to $1,300 on a house valued at the median price, depending on tax rates where it's located.
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• Homeowners association fees: $350. Some neighborhoods have HOAs, others don't, and fees can vary greatly.
• Termite bond: $330. If you live in the Lowcountry, you'll want termite protection.
• Stormwater/Solid Waste fees: $120 to $240 in most areas.

Add them up, and on a monthly basis, those expenses bring the monthly expenses plus mortgage up to $1,425.

Plus at least $100 a month to account for repairs and replacing stuff that breaks. The to-do list never goes away.

For information on Renting  an apartment in Charleston, SC, contact Abberly at West Ashley.

Original article – The Post and Courrier