Five Reasons to Trade Your Rental Key For a House Key
The current economy has discouraged a lot of renting consumers from home ownership. Of course, the plethora of doom and gloom finance pundits and recurring bad housing reports also has an impact on the consumer as they weigh the option of Owning vs. Renting. However many fail to see the true advantages of home ownership. Hint- investment gain is only a small aspect of home ownership. If you are thinking lifestyle satisfaction and individual comfort, then you are getting closer. The New York Times, Ron Lieber (08/27/2010) provided a true picture of the advantages of Owning vs. Renting.
Be Your Own Landlord
Yes, your lender can foreclose if you fail to pay your mortgage. However, most lenders are actually pretty reasonable and understanding; certain assistance, such as a hardship deferment or extension, may even be offered if you run behind. On the other hand, a landlord typically won’t be so lenient with a renter, and he may decide to sell his property at any time.
Forced Savings with the Principal
Home prices may fall further and your 401(k) may lose value before the economy is “restarted.”
However, both of these are usually long term investments. If history is any judge, the housing market will rebound, and then you will most likely see a modest increase in value. Either way, there are no possibilities of monetarily gaining anything as a renter.
Fixed-Rate Mortgages Do Not Rise
One perk to homeownership with a fixed-rate mortgage is that it never rises, unlike rent that fluctuates at property owner’s discretion. Additionally mortgage rates are currently at a record low! When thinking about Owning vs. Renting, ask yourself if you eventually want to be finished paying for housing or pay for it indefinitely?
More for Your Money
With fixed 30 year rates incredibly low you can buy more house for less money. For example, if you purchase a home with a loan amount of $200,000 at 4.25% your monthly payments on this loan amount would be around $983/Month*. If you purchased when rates go up by 1% to 5.25% and you wanted to keep your payments around $983/month you could only get a loan for $178,000. What this means is that you can get approximately $22,000 in upgrades or a better house for the same payment. That is why it is much more advantageous to buy when rates are as low as they currently are.
School System
A quick research of many “For Rent” websites and you will see that a common review complaint is about the area school system not being up to par. This is usually because a rental that is large enough to accommodate a moderate- sized family is harder to find in an area with an above average school system.
Appeal
What is appealing to you: Space, Interior Aesthetics, Exterior Aesthetics, Peaceful Neighborhood, Attractive community, Sizable yard and/or Privacy? There may be a few opportunities for renting such however they are few and far between. The more of these qualities that are appealing to you the further you move toward Owning vs. Renting.
If you are considering taking the next step to home ownership feel free to discuss your options with Jay Parham, Broker and Owner of New Homes Market Center (866) 897-3777 and we will be happy to assist you in getting started with your free loan pre-qualification and help get you on the path to home ownership.