Whose mortgage do you want to pay?
Some people have not purchased a home because they are uncomfortable with the obligation of a mortgage. Everyone should realize that unless you have a rent-free situation, you are paying a mortgage – either yours or your landlord’s.
The Joint Center for Housing Studies at Harvard University:
“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.”
A benefit of a 30 year fixed rate mortgage is that your principal/interest payment will not change for the next 30 years…unlike rent which will continue to rise over the next 30 years.
As a home owner, your mortgage payment is a form of ‘forced savings’ allowing you to have equity appreciation. As a renter, you guarantee the landlord is the person who gets that equity.
Interest rates are still at historic lows, making it one of the best times to get a mortgage and make a move into your dream home.
Real Estate Bottom Line
If you are a first time home buyer, looking to downsize or considering a vacation home purchase, now may be an excellent time for you to buy.