Buying vs. Renting: 5 Reasons to Buy a House
Whenever you hear the words “Your lease is up,” it may be time to consider your next step with your living arrangements. There are some solid reasons to become a homeowner, according to National Public Radio:
According to the Urban Institute, homeownership has traditionally been an important way to build wealth. The Urban Institute cites studies that show the average homeowner has household wealth of $231,420 compared to the average wealth of a renter of $5,200. Those studies claim the return for homeownership (not including any tax benefits) are higher than the after-tax returns on a bond index and on the S&P 500. It further states that while homeownership is not the universal panacea, the financial returns on homeownership have been more beneficial than renting for most homeowners and will likely remain so if current patterns continue.
Flexibility of an asset
Although it can sound a lot easier to get out of a rental if you get a job that requires you to move, homeownership still may offer flexibility in this regard. If you move before your lease is up, you could forfeit your deposit. Also, a homeowner who feels compelled to accept a job elsewhere can keep the house and rent it. Or, any equity that's built up in the house can be cashed in and applied toward buying a new home.
Your rent doesn't go up
While it's true homeowners may have to face utility rate increases, those homeowners who have a fixed-rate mortgage – or if they've paid off their mortgage – don't have to worry about rent increases. Inflation increases many costs, including the rent. An apartment in a trendy area of town is almost sure to go up in rent.
Down payment considerations
You can get into a home with a low down payment. There are programs for first-time homebuyers, those people making the leap from renter to owner. Learn about the options available through an FHA loan (a mortgage loan insured through the Federal Housing Administration) and a VA loan (designed for military members, veterans and surviving spouses, and guaranteed by the Veterans Affairs Department).
A sense of security
Owning a home can give you a sense of accomplishment and security. It is, after all, the American dream. It's your home to decorate as you want and not worry about a landlord telling you “No.” It's a place where you can plan and enjoy your hobbies, play with your kids, or barbeque with your friends. You can make additions and upgrades and maximize the potential of your property.
A credit union like RBFCU can help you with a mortgage and so much more. They can be your trusted start-to-finish guide to buying a new home.
This article is intended to provide general information and should not be considered financial advice. Please consult a financial professional before taking any action and to determine how the information provided in this article may apply to your situation.
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