Unsure if You Should Rent or Buy?
People generally have two options living in a place and ultimately calling it their home. One is to rent a home that someone else owns and the other is to purchase a home to own themselves.
However, all these rising costs can make deciding whether to rent or buy a dizzying debate.
“Maintain financial flexibility and keep your costs of getting in and out lower!” Your rent brain says.
“Buy now before mortgage rates go any higher and start soon to build equity before it is late!” is what your buyer instinct says.
Factually, the decision between renting or buying for most people is less about home prices or rents and more about whether you’re ready to be a homeowner.
Facts about Rent
Many people believe that renting is less expensive than owning a house. But it turns out it’s actually cheaper to pay a monthly mortgage than rent. The number of homes available to rent across the country is low and thus it is exorbitantly priced. New research has found that it is now cheaper to pay a mortgage than pay rent in all areas for starter and family homes.
With the news of the Fed raising interest rates once again, the purchase market will see fewer players owing to affordability. Thus, renters have a better opportunity to strike a better deal with fewer competitors and thus offer price can remain closer to the listed price.
Let’s try and understand why is it better to own a home rather than stay in a rented property.
Owning a home is an investment many people can understand better than buying stocks because they get the tangible daily lifestyle benefit of living in the home. But the financial benefits are also significant and can be more substantial than stock investing. As a home appreciates, it accrues faster than a stock might because you get the appreciation on the entire home’s value, not just the gain your down payment cash invested.
The Advantages Of Buying A Home
Let’s take a peek:
- Your monthly repayment is for the equity you will own and not paying your landlord’s mortgage.
- You fully own your home at the end of the mortgage’s term. That makes you a Homeowner.
- With rising home prices your equity also rises.
- You don’t need other’s permission to have pets or redecorate
- Any uplift you make to your house could increase its value
- You can’t be forced to move by a landlord
Moreover, many homeowners reap benefits that you can’t get from renting, such as financial security and stability and tax deductions for retirement savings. With each mortgage payment, you get closer to fully owning the home. The equity you build can be leveraged for loans like cash-out refinances, home equity loans, and lines of credit that can be used to improve the home and boost its value or be used in financial emergencies.