The Cost of Not Owning Your Home
Not buying a home right now will cost you, because home prices and interest rates are going to rise. Many renters would like to own but think they can’t afford down payments or won’t qualify for mortgages. Those are the two main reasons cited from many experts out there. For a good percentage this may be true. But for many, this may just be a state of mind, or the lack of knowledge about the homebuying process. Buyers get more for their money than renters, so renters that think they have to save to put a 20% down payment, or that they won’t qualify may be missing out.
There is proof exists that owning is financially better than renting… such as:
- Homeownership is a form of forced savings, because as values increase your equity grows.
- Homeownership provides tax savings, even with the recent changes in the tax reform.
- Homeownership allows you to lock in your monthly housing cost, unlike rent that goes up every year, a 30 year fixed rate mortgage locks you monthly housing cost in for the length of the loan.
- The money you put into home improvements, including furnishings is adding value to your landlord, not you. As times change, trends also change, so we often do improvements to our home environment that are updated and trendy.
- No other investment lets you live inside of it. This seems like a funny statement but its true. Think about it. You can put a lot into the stock market, but you still have to have housing!
- Studies have shown that a homeowner’s net worth is 44x greater than that of a renter. Every time you write out a check for your mortgage, you are putting money back into your pocket as long as we have a healthy economy. As a renter, you are taking money out of your assets and putting into your landlord’s.
- A family that purchased an average-priced home at the beginning of 2017 could build more than $48,000 in family wealth over the next five years. Every year that you put off purchasing a home, this number increases.
- Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment– along with a profit margin! Homeowners are smart to have a household maintenance fund, that can lessen the impact if something does go wrong. Homeowner warranties are a great way to prevent costly repairs when purchasing a home as well.
Owning a home has always been, better financially than renting. So, even if you think you don’t have enough money saved, or you may not qualify, you should at least try. You just may be surprised. For more information on the mortgage process or to get preapproved, give us a call. Thanks for joining me for this week’s tip. Have a great day.