Thursday, November 6, 2014

Renting? You are still paying a mortgage- why not reap the benefits?

Either Way, You’re Still Paying a Mortgage
November 4 2014
There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage- or perhaps you can't because of a short sale or a foreclosure. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s. There are programs out there to help get you back on your feet and start reaping the benefits that you deserve!
As a paper from the Joint Center for Housing Studies at Harvard University explains: 
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.
As an owner, the mortgage payment is a ‘forced savings’ which will allow you to have equity in your home you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity.
Bottom Line
Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are still at bargain prices.

If you are paying your landlord’s mortgage, you are giving him some of the benefits of ownership that should fall to you since you are paying for it.  Why not find out how to reap the benefits and in some cases pay less to own your home than what that landlord is charging you? Contact me today to find out how to start!