Believe me, I understand renting has a very important purpose and can be the wisest choice in certain scenarios. My first year in Daphne I my family and I lived in a rental property. We were in transition from our relocation and did not yet know where we would want to purchase our home. Although it was the right decision for us at the time, I look at that year as money lost and happiness sacrificed. We rented an 1,800 square foot house that was built in the 70s, had no fenced yard for our two dogs, had no level outside area for our toddler to play, and cost us $1,200 per month. A couple months ago we purchased a brand new 2,200 square foot home that has a fenced back yard, a large lot that is level and has plenty of room for our little one to run and play, and only costs us $1,300 per month.
Home ownership rates are the lowest they have been in the last 50 years. Yet a large portion of Americans are still renting properties, instead of enjoying a home of their own. Consumer reports believe this is an issue because of a buyer’s lack of trust in their ability to purchase. It is still a long standing notion that a buyer needs 20% towards the cost of the home in order to move forward, but this isn’t true. With countless down payment assistant programs and closing cost roll-ins, a homeowner could move in with as little as a few hundred to a couple thousand dollars. Which is a huge difference in the time it takes to save up to make the move.
Another reason to purchase in today’s market are the low interest rates available. The money saved over a mortgage’s lifespan can result in tens of thousands of dollars, if not hundreds. That’s more money in your pocket today. Don’t wait to buy when interest rates soar again. With low interest rates, that means your monthly mortgage payments are at a significantly lower cost, as well. With such a heated housing market, rental prices are soaring, and statistics are constantly showing that home ownership can be equivalent to your rental rate each month, if not less. Why remain in a small apartment or rental house if you can move into a home and pay a monthly rate that is the same? And even get a 3 bedroom house with a great backyard?
There is also a fear that a home can keep you “stuck” or “rooted” to one place without an easy transition out if you decide to move. Although the future of the housing market isn’t easily predictable from location to location, we can always discuss buying a home in an area that has a strong turn-over rate when a home hits the market. The equity build up when it comes time to sell is going to be far more beneficial than if you put money into a rental and decided to move. The money from selling the property can be used to purchase a new home. With renting, there would be no additional funds to transition into a new place.
Now imagine if you were renting a home for $2,000 per month. If your landlord is renting to make a profit, think of how much less you’d be paying on a monthly basis towards your mortgage if the home was yours. You wouldn’t be paying a landlord to profit off of you, you’d be paying a reasonable rate and would get to call the property your own.
Let’s discuss the steps you need to take towards home ownership. You might be pleasantly surprised about the type of home you can afford to move into.