02 Sep Which is Better? Renting or Buying: Read the Article
Which is Better? Renting or Buying: Read the Article Either Way You’re Still Have a Monthly Outlay!
Some people refuse to purchase a home because they are uncomfortable taking on the obligation of a mortgage or do not have sufficient credit or a down payment. Everyone should realize, however, that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s. So really the question becomes do you want to pay your landlord’s mortgage or your own?
As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:
“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”
With home prices rising, many renters are concerned about their house-buying power. Mark Fleming, Chief Economist at First American, explained:
“Over the last three years, renter house-buying power has increased fast enough to keep pace with house price appreciation, so the share of homes that a renter can afford to buy has remained the same since 2015.
Although mortgage rates are expected to rise, they are still low by historic standards, and real household incomes are the highest they have ever been. Assuming this trend continues, our measure of affordability, which takes into account income, interest rates, and house prices, indicates that homeownership is still within reach for renters.”
A mortgage payment for a homeowner is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you the only person building equity in their property is the landlord, you choose; which is better you or the landlord.
Interest rates are still near historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were about 4.51% at the end of August 2018. Click here for Current Mortgage Rates
Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.