Should You Rent or Buy a Home? | Tip Tuesday

"My mortgage payment will be too high."- Well, $2000-$3000 is the average rent for our area. Let's say you pay $2500 for rent where you live. If you lived there for 4 years, you'll have paid your landlord $120,000!!! Let that sink in! That is money that is paying someone else's mortgage. In the meantime, you'll never see a return on it. It's like putting your money down the toilet every month! Now, granted, your house payment will probably be higher than your rent. But, did you know that you can change your withholdings where you work so you get more money back every month? This can sometimes make up the difference between your rent vs mortgage payment. And you now have certain write-offs with owning a home. Always, always, always consult a tax professional before making changes.

"The market is too high."- Yes, currently, the market is up. But, there is nothing you can do about the market fluctuating. It goes up and down but the overall timeline shows an increase in market value. Plus, the interest rates are at an all-time low! In the 1980s, the average interest rate was 16%. Right now, interest rates range between 2.5-3.25%. This means you pay more on your principal and LESS on interest. Whereas, in past years, your mortgage payment was almost comparable because buyers paid MORE on interest but less on principle.

"If I buy, I'm stuck where I live."- Sure, but it only takes about 3 months to sell your home, from the time you sign the listing contract to the time you walk away with your money. You can also rent out your home and let another renter pay your mortgage for you. At the end of the day, every payment you make and added market appreciation gets you more equity in the home. The downside to renting is you have NO control over when the landlord decides to sell the home.

"I'll be responsible for the repairs."- Yes, you will. You always have the option to buy a condo that has an HOA. This fee covers typical maintenance like landscaping, roof, exterior repairs, and even fire insurance. Some people don't like HOAs but there are pros and cons like anything else. It might be the right fit for you. Also, some maintenance can be tax write-offs. Again, consult your tax professional to learn more about that. Something else to offset any worry of repairs, it is so important to get a home inspection and any other inspections before you buy a home. See more on that here. Plus, we buy our clients 1 year home warranties so any appliance covered under the warranty will be fixed or replaced at a minimal cost. 

"I don't have enough money saved for a downpayment."- You don't know this for sure until you see a lender! It is VERY important to meet with a lender before you're officially "ready" to buy a home. They can look at your finances and you may even qualify for downpayment assistance. You'll never know unless you meet with them.