For many people who have never owned a home, the thought of taking on a 30-year mortgage is quite daunting. These people generally assume that renting is the better option for them. Not always true! When comparing renting vs buying, here are our top five reasons to stop paying rent and begin the process of looking to buy your own home.
- Mortgage Rates: Although rates have risen a bit since their historic lows of last year, interest rates still remain very reasonable compared to recent history. That said, over the next year, most experts are expecting rates to rise. Waiting a year to buy could actually cause your buying power to decrease if rates do take their predicted rise.
- Equity: Owning a home is a great way to increase your personal wealth. With each mortgage payment made, the principal balance on your home loan decreases and you build equity. Rent paid to a landlord is simply allowing them to build equity on your dime. That is money you will never see again! Equity is the difference between the value of your home and the outstanding principal balance on your loan. Simply put, equity is the value that your home builds over time.
- Personalization: Generally when renting a home or apartment, you are very limited on the number of cosmetic changes that you can make to your residence. Don’t like the flooring in your apartment’s living room or the color of the counter tops in the kitchen? Tough luck! When you own your own home, it is yours to personalize to meet your tastes.
- Lock In Your Monthly Housing Expenses: With most apartment or home leases, your monthly rental rate is locked in for only 12-24 months. In the coming years, rental rates nationwide are expected to rise between 5-8% per year. The best way to shield yourself from these increases? Buy a home and lock in your payment for the next 30 years!
- Tax Deductions: We all hate paying taxes and look forward to receiving that refund check from the government in the springtime. One of the best tax deductions that you can receive is for interest paid towards your mortgage. Additionally, certain home improvements such as energy efficient appliances can qualify for other tax credits.
Want to learn more about how easy it is to buy a home and stop paying rent? Give us a call today!