The Benefits to Home Buying vs. Renting?
By Mark Wohlschlaeger - Movement Mortgage
The Benefits of Buying
As home prices and interest rates continue to rise, the advantages to buying a home increase by the day. Here are a few of them:
Steady Payment: Unlike rent, which can increase 3% a year, a fixed-rate mortgage will keep your principal and interest rate the same for the life of the loan. Buying a $250K home vs. renting can net you $4,697 in cash-flow alone over a 9yr period. That is a dollar for dollar increase in cash before equity is even considered.
Increasing Equity: Homes typically increase in value, building equity that you can use as a nest egg for your future. Using the scenario below, you could increase your net wealth by $77,067 over 9 Years via appreciation and mortgage amortization. It is like a hidden piggy bank that continues to increase every time you make a payment. You can also leverage that equity by applying for a home equity line of credit, to make improvements to your home, pay off student loans, or cover unexpected costs.
Tax Deductions: Several tax benefits cater exclusively to homeowners, allowing you to deduct things like mortgage interest and property taxes. Always consult your tax advisor regarding the deductibility of interest.
The Challenges to Buying
Buying a home does require a few upfront costs such as a down payment and closing costs. However, there are down payment assistance programs for first-time homebuyers that can help. Especially in North Carolina where the state offers financial assistance to qualified buyers.
There is also less flexibility when you own a home. After a one-year lease you can walk away, but removing the mortgage on your home will likely require selling it. You also have the responsibility of yard work and repairs when you become a homeowner
It’s About More than Just Money
Homeownership also provides a sense of security that’s appealing for those looking to put down roots or start a family. Owning your home can feel empowering. You have a place to call your own and customize it just the way you want. Paint the walls or knock them down – the choice is yours. If you’ve been solely focused on crunching the numbers, step away from the spreadsheets for a moment and ask yourself a simple question: what’s going to make me happiest?
If you want to explore the PreApproval process visit my website at https://movement.com/lo/mark-wohlschlaeger/ or give me a call at 919-671-7340.
And if you need help finding your dream home, connect with the Quarantello Team by clicking here.