The decision on what makes the most financial sense to buy or rent has been a big topic of discussion for many years. Those who support buying state that buying is an investment, where you can be paying down your own mortgage and in turn building equity. Those in favor of renting state that renting helps elevate the extra costs of owning a home and therefore frees up additional funds that add up. So who had the right answer?
We all are worried that we are making the right choice. The continued push is that your not paying for new roofs or leaking pipes when renting and that stocks and bonds actually has a higher return rate but if you think about it mortgage rates are still relatively low and prices have not increased to the point of the most recent bubble so if you break it down, buying is still a cheaper option then renting.
Buying a home should be thought of more as an investment and it is one that increases in value for every year that you continue to live in and maintain your home. A lot of the decision should be based on timeframe as well. If you only plan on living at a property for 5 years or under, renting may end up making the most sense but if you plan to stay put for a while, chances are the home purchase will appreciate over the course of time and result in a much larger return of investment. Renting a home also increases over time with the market value of rent in your area but if you are buying a home, your monthly mortgage payment is locked in. In the most recent years, rental rates have been rising quicker then mortgage rates.
Another advantage of owning vs renting is the freedom and ability to do what you want to your home. Many renters have restrictions on painting or making any cosmetic changes but in your own home you are free to update paint colors, flooring, and any other item as you would like and prefer, sometimes making the home a much better fit for you.
Another factor that extensively helps is if you can afford to pay a bit more toward your mortgage each month weather you decide to do bi-weekly payments or just occasionally make an additional payment. These factors help a great deal in paying down the principle amount and decreasing your pay off when it is time to think about selling.Owning a home can also help build your credit. One of the best ways to increase your credit score is with an on time monthly mortgage payment. Increases in credit scores can help you work towards other goals aside from owning a home.
To help make your decision easier and hear more about the housing market in your area, reach out to one of our skilled professionals at Androvise Realty to help show you property values and connect you with a mortgage professional, call us at (207) 333-6020.