#Millennialtalk Re-Cap, Fidelity helps break it down: rent vs buy

Our last #Millennitalk Twitter chat with Fidelity Investments brought inspiration, clarity, and structure for those interested in learning more about the emotional and financial decision of buying your first home.

If you missed our chat…not to fear! See the Highlights below.

CHECK IT OUT, Helpful Tool:

With Fidelity Investments’ new Rent vs Buy calculator, explore which option may make more financial sense. And for those who are ready to buy a house, check out this homebuyer’s checklist to help get your finances in order.

Q1. Let’s start with the basics what is the first step we can take when deciding if we should “Buy or Rent.” #Millennialtalk 

Q1A1: 1st ask yourself how long you plan to live there? If answer is < 5 years, then buying generally doesn’t make sense. #Millennialtalk @JeanChatzky

Q2A1: Absolutely. If you’ve shown that you’re a responsible borrower by paying on time w/student loans/CCs, it could help. #Millennialtalk @JeanChatzky

Q3. How can having a good or bad credit score have an impact on the ability to buy a home? #Millennialtalk

Q3A1: Your credit score is very important. You need a credit score of 720 to qualify for the best rate on a mortgage. #Millennialtalk @JeanChatzky

Q4. How can we find out if we are throwing away money paying rent? #Millennialtalk

Q4A1: It’s complicated. If you’re renting to save money, you’re only capitalizing on it if you put savings AWAY for tomorrow #Millennialtalk @JeanChatzky

A4. Rent vs. buy is a hot debate, & a personal choice; http://go.fidelity.com/pebz  addresses important considerations – #MillennialTalk @Fidelity

Q5. How can we create a savings plan to help us prepare for upfront costs associated with buying a home? #Millennialtalk (brokers’ fees, appraisal fees, title insurance, mortgage)

Q5A1: Like u save for any goal. Add up what costs are likely to be, divide by no. of months until u want to make purchase. #Millennialtalk @JeanChatzky

Q6. Can you buy a house with less than 20% down? #Millennialtalk

Q6A1: You can, but expect fees and you’ll need to buy mortgage insurance, either private mortgage insurance (PMI) or FHA. #Millennialtalk @JeanChatzky

Q7. Are there tools you can share to help us determine the impact that buying or renting may have on our long-term finances. #Millennialtalk

Q7A1: Yes! I have a Rent vs. Buy calculator on my site: https://www.jeanchatzky.com/tools/rent-vs-buy-calculator/ #MillennialTalk @JeanChatzky

Q8. How important is it to think LONG term? The cost of home ownership can vary if you plan on living in that home long term correct? #Millennialtalk

Q8A1: Yes it can. Harvard study finds you need to plan on spending 1-2% of the value of your place on maintenance/yr. #Millennialtalk @JeanChatzky

Q9. Is there a certain % of our income that we should a lot to home ownership? #Millennialtalk

Q9A1: I say confine your spending on housing to no more than 35% of budget. This includes taxes, insurance, maintenance. #Millennialtalk @JeanChatzky

Q9A2 For example: According to a Fidelity article: A good rule of thumb is to limit your housing costs—mortgage payments and interest, real estate taxes, and homeowner’s insurance—to 30% of your income. https://www.fidelity.com/mymoney/rent-vs-buy #MillennialTalk @JeanChatzky

Thank you Fidelity, and specifically to Kristen Robinson, Jean Chatzky, Brittney Castro for joining this week’s Twitter Chat and offering so many insights to those debating whether buying a home is the right financial decision. To explore more personal finance topics related to investing, spending, borrowing and preparing, visit Fidelity’s MyMoney.