Rent Vs. Buying
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Article Supplied By: Deborah Gilpin Broker / Owner G & G Realty & Auctions agent436@usa.net |
Home Sweet Home VS Renting
We all know that unless you are still living at home with Mom and Dad, you are paying to live somewhere. You are paying a mortgage. Are you paying one for yourself or for your landlord?
If you are renting and decide to buy a home, your money is gone. If you buy a home, your money is an investment in your future. You are building equity in your home. Your homes equity may be used for future loans. Paying a mortgage payment is also a very good way to establish credit. Mortgage payments made on time are very important.
Tax advantages are another reason to buy. Real estate taxes and interest paid on mortgages is tax deductible.
It is really nice not to have to ask permission to paint or make changes in your home like you would if you were renting. The home belongs to you and you are in control of how you decorate it.
Your own home will also make you feel more secure. As long as you make your payments and pay your taxes, no one can take your home away from you. If you are renting the landlord can at any time tell you that you need to move for any reason. He might want to live there or maybe he is going to sell the home.
Knowing that the home you are living in is yours is a symbol of achievement. You work hard and it is very satisfying to come home at the end of the day to something that is worth working for.
Just imagine:
You have been renting for the last 5 years at $500 a month. You now have $30,000 dollars invested in someone else’s property. WHAT A DOWN PAYMENT ON A HOME OF YOUR OWN!!
There are many different ways to finance a home. Starting at NO down payment. A local RALTOR can find a plan just for you and if at this time it is not possible to do financing, your REALTOR will help you get ready for that special day.
I have to disagree. Renting is better, but it also depends on whether you plan to stay in one place a long time.
I found a calculation on a website to make this easier to understand: http://www.sunchaselv.com/buyingvsrenting
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You are absolutely right. Some of the reasons to continue to rent in this area are that you are a student at the University and do not plan on staying here or you know that there is a job change in your near future. Sometimes it is just credit. This means that you will have to make some changes and get ready to purchase a home. A good Loan Officer can help you with this.
The website you spoke of used a $200,000 house as an example. In this area that is not a good example. The average home sale is $97,000 but that is not what most first time home buyers spend. Let me give you an actual example. I sold a home to a couple that have lived in the same house for 10 years and have paid $500 a month for rent. We were able to find a wonderful home for $58,000. Nice updated 2 bedroom with fenced yard and 1.5 car detached garage. There was a 3% down payment.
Principle and Interest - $365.69 at 6.5% interest
Taxes - 60.41 with no exemptions. That will go down in 2009.
Homes owners insurance - 45.00
Private Mortgage Insurance - 25.00 until 20% is paid
Total monthly payment of $496.10 plus they are able to take the taxes and interest off their yearly taxes. Less than what their rent payment was. Now they have something of value that as long as they take care of it will always have value. What is sad is that they paid $60,000 in rent. They wish they had done something sooner.
You have to make the decision if it's right for you. Are you ready to make a mortgage payment for yourself or do you want to make a mortgage payment for someone else? If the time is right...Go For It!
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