Owning a home is a substantial investment. More often than not, potential home buyers put off the prospect of purchasing a home for as long as possible under the assumption that renting is the best option. While renting may seem like the best, less expensive option, it may cost you more in the long run. Here are a couple reasons why:
Rent vs mortgage
The simple truth is that rent payments can and will continue to go up. Tenants can move into and a space with their rent at an attractively low rate but those rates are always subject to increase.
A mortgage can be placed at a fixed rate and not be subject to increase according to the terms of your mortgage agreement. This means if you are eligible for a low-rate fixed mortgage, your payments will remain the same for at least 15-30 years.
Mortgage as a savings account
Saving money is tough! But think about it this way…how easy would it be for you to save 400k? If the mortgage on your house is 400k it is almost like your mortgage is your savings account. Renting over time only makes you “house rich and cash poor”.
It would be advisable to seek out the most up to date mortgage rates online. Many potential home buyers search online using Lending Tree. This particular website offers a variety of mortgage lenders that are competing against each other for your business. This is extremely helpful when trying to find a low interest rate.
Financially, owning a home will always be more beneficial than renting. Don’t let the difficulties of saving to own a home hold you back from the future you deserve. Start saving for one of the most important investments of your life today!