Is it Time to Stop Renting and Purchase a Home?
Are you renting a home and wondering if it might make more sense to buy one instead? As mortgage rates continue to be relatively low, it is proving to be more economical in many cases to purchase a home than continue renting. Not only is buying a home an investment in your future, but you will see a tangible return on your money instead of lining your landlord’s pocket.
When considering your options, ask yourself this question: Where do you want to be in three years? Zillow’s chief economist, Stan Humphries, said:
“Everyone understands if you’re going to be in a house 20 years, you should buy a house, and if you’re going to be in a house for six months, you should rent it. What they don’t understand is when those two lines cross.”
Humphries refers to that point as the “Breakeven Horizon,” the gray area where consumers must decide the point, in years, at which the accumulated costs of renting exceed the cost of purchasing. With national mortgage rates at record lows, that point is now only about two-and-a-half years of renting.
Still on the fence about whether to rent or own? Another consideration is that homeowners receive tax benefits that renters do not, because a significant portion of the mortgage interest and property tax paid is deductible. Also consider your equity. When you pay rent, you are essentially paying your landlord’s mortgage or adding equity to their bank account. In contrast, when you opt for a mortgage, you increase the amount of equity in your home with every payment.
Call me today to set up a time when we can look at your buying options.