Winning Agent

Sales That Work

  • About
  • Store
  • Blog
  • The Stream
  • Forum
  • Jobs

To Rent or Buy: Why Homeownership is (Usually) Your Best Option

June 10, 2021 by Becca Stewart Leave a Comment

Share this post:

Share on TwitterShare on FacebookShare on PinterestShare on LinkedIn

If you’re wondering whether it’s better to rent or buy, we’ll fill you in on a secret: homeownership is an excellent investment. We’ve covered all the reasons before (read them here), but current interest rates and market conditions have us ready to attack the topic again. Homeownership is one of the best ways to build long-term wealth, secure housing for your retirement, and build towards a financially stable future.

Renting Vs. Buying: Homeownership is A Great Investment

If you can afford to purchase a home, you’ll be investing in your future. Instead of throwing away your money on rent each month, you’ll be paying down a mortgage instead. Thirty years from now, you could still be paying rent, with nothing to show for it, OR you could own a home free and clear. Imagine the financial freedom of living without a mortgage or rental payment!

Home for saleMany people choose to purchase a home because of the stability it offers. Owning your home means you’ll never have to worry about rising rents or overbearing landlords. You can paint the walls whatever color you please, and there’s no such thing as a pet deposit.

Sure, there are other factors to consider (no landlord means you’re on the hook if something breaks). Bit historically, real estate is a safe investment that generally increases in value over time.

Right now is the ideal time to buy a home. Interest rates are lower than we have seen in decades, meaning homeownership is within reach for those who never thought it possible.

When Buying Isn’t the Right Choice

It’s not always better to buy. In rare cases, putting off homeownership might be the best decision. If you aren’t financially independent, expect to move within the next two years, have a great deal of debt, or don’t have stable employment, owning a home might not be the right choice.

Often, people choose to continue renting if they have poor credit or large amounts of debt. In these instances, it might be wiser to focus on paying down debt, increasing your credit score, and saving for a down payment while continuing to rent.

Once you improve your credit score and get your debt-to-income ratio under control, you will qualify for a lower-interest loan. Even a small decrease in the interest rate can save you tens of thousands of dollars over the life of your mortgage. In this case, putting off buying a home is a better financial decision in the long-term.

There are also other instances when it’s better to rent than buy. Consider all your options carefully, and consult with a financial advisor, lender, or real estate agent for more information.

Should I Rent or Buy?

There are many factors to consider, including your job stability, financial situation, geographic location, relationship and familial situation, and future plans. However, if you are ready to put down roots – and have the means to do so – homeownership is a great investment.

Talk with a lender or local real estate professional. You can learn more about the real estate market in your area and decide whether you should rent or buy.

You can also use this calculator to help determine if you can afford a mortgage.

How You Can Purchase a Home This Year

So you’ve decided to purchase a home. Congratulations! Before you get the keys to your dream home, there are a few things you’ll need to do:

  • Secure a down payment. Without at least 20% of the home’s price down, you will likely have to pay private mortgage insurance (PMI), which can add hundreds to your monthly payment. However, some programs allow buyers (particularly first-time homebuyers) to get a mortgage with minimal money down. Talk to your real estate agent or a reputable lender to learn more about your options.
  • Pay off as much outstanding debt as possible. The less debt you have, the higher your credit score. That credit score impacts your ability to get lender approval for a mortgage. It also determines your interest rate. If you have a large amount of outstanding debt, consider how you might consolidate your debt or pay it off before purchasing a home.
  • Decide where you want to live. Choosing where to live is one of the most important decisions in the homeownership process. Homeownership is worth the cost only if you plan to stay in one location for several years, so think carefully about several factors: commute time, local schools, access to medical centers if necessary, shopping options, local entertainment, and future building plans for the area, for starters.
  • Hire a Realtor. An experienced real estate agent can help you find a reputable mortgage lender and then help you find the home of your dreams.

Homeownership is one of the most critical steps you can take to securing financial independence. It’s part of the American Dream – and there is nothing quite like walking through the door of your very own home.

More Great Reading

Share this post:

Share on TwitterShare on FacebookShare on PinterestShare on LinkedIn

Filed Under: Blog, Web and Social Media Tagged With: Down payment, First Time Homebuyer, Mortgage Loans, PMI, Rent or buy?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Looking For Something?

Email Newsletter

Sign up to receive free updates from the Winning Agent blog.

Connect With Me

  • Facebook
  • LinkedIn
  • Pinterest
  • Twitter

StudioPress Real Estate WordPress Theme: Agent Focused Pro Theme

StudioPress Premium WordPress Themes: Winning Agent Pro Theme




Loan Types & Property Definitions

There are a lot of different types of mortgages, and there are a lot of different types of real estate property. Here is a list of the most common types of each. We’ve added some links to the most popular articles on the subject.

Read More

Real Estate and Mortgage Forum

We think getting many viewpoints to a particular question is important because it helps you to make better decisions. It’s so important that we have woven the Forum all throughout Winning Agent. We invite you to ask questions, make comments, and be part of the discussion.

Read More

Glossary of Real Estate Terms

Real estate and mortgage finance often times comes with its own unique language. If you work with it every day, it becomes 2nd nature, but most people don’t work with it every day. So we’ve created a glossary of mortgage and real estate terms.

Read More

Copyright © 2022 Winning Agent · Powered by the Genesis Framework · Contact Us
Become an Affiliate
This site uses affiliate links, but know that we only recommend products we personally use and enjoy!

 

Loading Comments...