Renting vs Owning
Here are some things to consider in the Pros and Cons to home ownership. Visit our Mortgage Center to find a calculator that will help you decide if it makes financial sense to own your home, as opposed to renting. This calculation is just one piece of the puzzle when it comes to what will most likely be the biggest financial decision of your life! Mortgage Center Tax advantages: Mortgage interest is tax deductible and should be considered when you are comparing rent payments vs. mortgage payments. You should always talk to a tax professional to see how you will be affected, but here is a general example of how it works. (example) Potential for equity increase: There is a chance your home will increase in value. There is a chance your home will decrease in value. Let’s assume you get a 30 year fixed rate principal and interest loan (which is the most common loan type these days). After 30 years (if you do not refinance), you will owe nothing. Whatever your house is worth at that time represents the nest egg you have built for you and your family. After 30 years of renting, you will own zero. Which is better….owing nothing or owning nothing? Interest Rates are Low right now! A lot of buyers are on the fence right now because they believe real estate prices may go down over the next year. O.K., I’m not going to argue with that. How much do you think they are going to go down? 3%, 5%? The next question you have to ask is, what do you think may happen with interest rates? Most people would say they are most likely to rise, but how much? 1%, 2%? Who knows what is going to happen, but here are a few examples of how your monthly payment may be affected and the potential savings over the long run. (examples) Rent Control: If you get a 30-year-fixed loan, your monthly payment will be the same for the next 30 years. The same cannot be said for your rent payment. Does your landlord usually raise the rent or lower the rent?