Should I break my lease now and buy a Gardner home with USDA Rural Development funds or wait until next spring when my lease is up? It will cost me $2500 to break my lease.
Great question. If you could buy a home now in Gardner with zero down like the USDA mortgage loan and it cost you $2500 to break the lease, you might find it beneficial to buy now.
Next year when your lease is up the only loan that might be available for you will be a FHA mortgage. A FHA mortgage requires a minimum of 3.5%.
Lets look at the numbers:
On a USDA Mortgage Loan you can purchase a $175,000 with zero down. If you wait until next spring you will need a minimum of $6,125 down. If it cost you $2500 to break the lease now, it sounds like breaking the lease now and buying a home in Gardner is more advantageous than waiting for next year to buy a home in Gardner.
Other items to consider:
1) USDA charges a smaller monthly fee so the monthly payment will be lower.
2) Interest rates might go up and the monthly payment will be higher.
3) FHA mortgage underwriting may get more difficult to process.
4) Some landlords will work with you if you give plenty of notice and help in finding a new tenant in reducing the penalty for breaking a lease.
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