Rent Or Buy Santa Cruz Real Estate

Unless you’ve been living in a cave you’re probably aware that the housing market right now is anything but stable and nobody quite knows when exactly we’ll hit bottom. Even Santa Cruz Real Estate has taken a hit and now  Santa Cruz Real Estate Agents everywhere (it seems) have advice and tips on when a good time to buy is. Is it a good time to buy right now or are you better off renting? The bottom line today is that you need to be careful with whomever you choose to trust as your source of information so you can avoid losing a bundle of cash.

When choosing between renting and buying the best decisions are always decisions made with finances at the forefront. No financial advisor in the world will know your financial situation better then you do. The best advice anyone can give you is to learn as much about finances and investing as possible and then hire a financial advisor to to do just that - advise you but not make your decisions for you. People retirement accounts are disappearing right now because they basically took all of their retirement money handed it over to someone and said “Here grow this.” Like I said nobody knows your financial situation better then you do.

Make a careful examination of both renting and buying real estate in Santa Cruz. Pretty much if you can’t buy you’re going to be renting so we’re not going to talk much about renting in Santa Cruz here. Rather we’re going to focus on buying Santa Cruz real estate.

Buying Santa Cruz real estate is much more complicated then renting. When prospective homeowners are trying to figure out what their monthly expenses will be for buying a home they often refer to a calculating device referred to as a PITI. PITI is an acronym for

  • principal
  • interest
  • taxes
  • insurance
which are the primary components of a mortgage. Some quick definitions for the above terms:
  • principal - amount paid towards the actual part of the loan. When you buy a home for say $300K you actually (if you get a 30 year mortgage) end up paying the bank back about $700K (hypothetical) the rest you pay the bank back is
  • interest - this is why the bank loans you money. interest = profit for the bank. They’re in it for the money. And when you can’t pay them back they run to the government for a bailout:-)
  • taxes - property taxes. Usually about 10% annually of your home value
In addition to your mortgage expenses, buying Santa Cruz real estate will also entail other monthly expenses such as maintenance of your property, utilities like water, power, phone lines, cable, etc., and furnishing the new home when you first move in is always a nice little surprise.
That’s it for today but that’s not the end of this article. Part 2 of Rent Or Buy Santa Cruz Real Estate coming soon…

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This entry was posted on Wednesday, October 29th, 2008 at 1:09 pm and is filed under Santa Cruz Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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