If you are considering the possibility of purchasing a home this year, you may have heard that renting is a smarter choice than buying for a number of reasons. For many people, however, that is not always true. Deciding whether to buy or rent depends on your individual options and circumstances. To help you learn more, here are a few myths that explore renting versus owning a home:
Myth No. 1: You can’t afford a down payment.
Many would-be homebuyers opt for renting believing that they won’t be able to save enough for a 20 percent down payment. But in reality, not all loan programs require a 20 percent down payment. Different loan programs require home buyers to put down different amounts as low as 10 percent, 5 percent, or even 3 percent. In fact, some programs require no money down, and in some areas, down payment assistance programs are also available.
Myth No. 2: Renting is cheaper.
This statement depends on your rent and the home values in your area. But even if your monthly mortgage payment ends up being a little higher than what you might have paid in rent, that money is going toward your own long-term financial investment. When you pay rent, you are making your landlord’s mortgage payment rather than your own. Talk to a mortgage consultant to determine a monthly payment with which you are comfortable, and compare it to the cost of renting to determine which is right for you. Or, use a mortgage calculator to get started!
Myth No. 3: You won’t recoup your money.
Real estate is often considered to be a safe long-term investment because home values have historically risen over time. Yes, the housing market may go through cycles, but if you plan to be a homeowner for a long time, your home can build equity and prove to be a wise investment.
Myth No. 4: Renting is less of a hassle.
While you may have less vested in a rental property, the work you put into turning a house into your home can be a richly rewarding experience. Not only can you create a home that suits your preferences without the concern of a landlord’s limitations, improvements you make to the property can also help build upon your initial investment.
I always recommend speaking to a lender to determine the best loan package for you. David Rossiello with Prosperity Home Mortgage is a wonderful resource. You can reach him at 410-952-2048 or firstname.lastname@example.org. Or, I’m always here if you have any questions and would be happy to guide you through the home buying process. Just contact me to get started.