What everyone wishes they were told when they were 22: Renting vs. BuyingWhen most adults look back on their youth, they often wish for a few things… Many wish they saved more money. Others wish that they followed their dreams. And every homeowner wishes they purchased a house sooner, rather than renting for the first 7 years after obtaining a steady job.Whether you rent a home or are thinking about buying, you have to start with the finances of it all: your monthly payments, insurance, equity, and long-term returns on your investment. And if you’re thinking about things in brass tax, no matter what financial arrangement you have, you still have a monthly payment, right? Right. But at the end of your lease and after all of those payments, you are left with what? The clothes on your back and furniture? For those who are looking to invest their money, renting may seem like a raw deal. However, if you’re leaning towards buying, a major incentive is that once your mortgage is paid -- you could be a proud homeowner!Reasons to consider buying over renting:Rent
- Monthly rent payments
- Due to the increase in demand, the cost of renting has risen -- dramatically
- Limited financial return on investment
- Rental payments are continuous and are usually a flat rate
- Restrictions on customization/personalization
- Renting may lead to frequent moving, which could add up in expenses
- Monthly mortgage payments
- Historically low mortgage interest rates
- A home could be an investment
- If you stay in the home long enough, you build equity
- Mortgage options vary greatly and may have the opportunity to discount over time
- If you can pay off your mortgage, your monthly living costs will dramatically decrease, helping you live almost rent-free
- Mortgage interest and insurance may be tax deductible
- Freedom to customize/personalize
- When it comes to the younger generation, many 22-year-olds seem to be making the Renting decision before researching all of their options.
- While the thought of buying a home is often associated with complicated language such as ‘interest rates,’ ‘taxes,’ or ‘maintenance costs,’ there are trained mortgage professionals who have made a career in helping buyers navigate through this language and make financially sound purchases. For someone who is fresh out of college and carrying a load of student loan debt, these terms may sound even more terrifying. But.
When it comes down to the tools available and the possible return on investment, it’s hard to ignore the argument and research that says buying could be a better long-term investment than renting. Plus, after all is said is done, you could think of it like this… If home is where the heart is: Do you really want your landlord deciding the fate of your heart?If you would like to learn more about your first-time homebuyer options or just have questions about renting vs. buying, it’s best to start with speaking with a qualified mortgage profession. Please click here to contact us today and hear more about buying a home.