Monday, July 9, 2018

Why Rent If You Can Buy

Though interest rates continue to rise in 2018, they have not increased as much as we initially expected and are still considered to be low. Yet a large portion of Americans are still renting properties, instead of enjoying a home of their own. Consumer reports believe this is an issue because of a buyer's lack of trust in their ability to purchase. It's a long-standing notion that a buyer needs 20% down towards the cost of the home in order to move forward, but this isn't true. With countless down payment assistant programs and closing cost roll-ins, a homeowner could move in with as little as a couple thousand dollars.

Though we are currently in a sellers' market (at least here in Rhode Island), home ownership in today's market is a great investment. The money saved over a mortgage's lifespan can result in tens of thousands of dollars, if not hundreds when you have a loan with a lower interest rate. With such a hot housing marketing, rental prices are soaring and statistics are constantly showing that home ownership can be equivalent to your rental rate each month, if not less. Why get stuck in a small apartment, when you can move into a home and pay the same monthly amount?

There's also the fear that a home can keep you "stuck" or "rooted" to one place without an easy transition if you decide to move. Although the future of the housing market isn't easily predictable from location to location, you can always discuss with your agent about buying a home in an area that has a strong turn-over rate when a home hits the market or a town that has a strong rental market. (Wouldn't it be great to lease your house to a tenant so that someone else pays for your investment while you move onto a different property?) When you continue to rent yourself, you have no equity when you decide to transition to a new place. 

Now imagine if you were renting a home for $2000/month. If your landlord is renting to make a profit, think how much less you'd be paying on a monthly basis towards your mortgage if the home was yours. Then you wouldn't be paying a landlord to profit off of you, you'd be paying a reasonable rate, and get to call the property your own. Discuss with your agent and lender the steps you need to take towards home ownership, you might be happily surprised by the type of home you can afford to move into.

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