Is buying a home a wiser choice than renting? I get this question ALL THE TIME, especially from twenty-somethings. At this moment in time, buying is the smartest decision. Please consider the following before your throw one more cent away on that home that you will NEVER own:
While comparing monthly mortgage payments to rent is a good starting point, you need to consider this, part of your mortgage payment is being applied to principal. This is forced savings! For example”e, if you purchase a $200k home with a 30 year mortgage at 4.25%, your monthly payment will be $993 with $285 of that amount going to the principal.
Low mortgage rates have kept homeownership from becoming more expensive than renting. If you are considering purchasing now, be mindful that real estate forecasters are predicting a significant increase in 2015.
As a renter, you have ZERO control over your housing destiny. The landlord is in total control. If S/he decides to sell or are foreclosed on , you will be out of a home. They can also raise your rent at the end of your lease or choose not to rent to you at all. Owning a home will give you a sense of security that you cannot find in renting.
You also have the option of doing whatever it is you want to do with your own home. Paint the walls garnet or orange? Go right ahead! It’s yours! Perhaps you want to add a deck or hardwoods? More often than not, these types of improvements add to the value of your home.
Owning a home will reduce your federal and state tax obligations because of the deductibility of interest payments on your mortgage. When you rent, you end up with 12 cancelled rent checks at the end of the year. However, as a homeowner, you end up with 12 cancelled mortgage checks that are nearly fully tax deductible in most cases.
Yes, owning a home comes with repair expenses down the road, but anyone who thinks that you do not need to worry about a leaking roof or shotty heating & air in a rental home has not met my new buyer client’s former landlord.
In short, the answer to the question of whether you should buy or rent is so obvious that it is hardly worth stating. Property prices and interest rates are going up. Owning a house is a wise move.
If you are considering investing in your future and telling the landlord, “goodbye”, call me today! (803).944.9544. Serving Lexington, Richland, & Newberry Counties.