The younger you buy a home; the more wealth you will have by the time you are 60. That’s what a new study from the Urban institute found. Can you believe that someone who bought their first house before 35 averaged over a $70,000 difference in housing wealth? Buying before age 25 may seem rushed and risky but results in the highest potential return on investment. Every year you procrastinate buying a home, you are losing thousands in potential equity. If you are renting year after year, you are essentially paying for someone else’s equity. In your early to mid-twenties, you may not be able to afford your dream home. However, buying a starter home could make obtaining your dream home a lot easier. As your equity grows, it puts you in a better position for when you are ready to sell. You can use your acquired housing wealth towards a down payment when upgrading to a better house.
Owning a house comes with more responsibility than renting. With that responsibility comes the freedom to customize your home as you wish, have pets without paying extra fees, and reap the rewards of potential tax advantages. Given all the pros of owning, you may still have your own reasons for preferring to rent.
Re-Think These Reasons for Renting:
- You don’t want to pay for the taxes or maintenance – The truth: You already do! When you pay rent every month, that check is covering the ownership, tax, and maintenance costs.
- You don’t think you can qualify for or afford a mortgage – The truth: You might be surprised! Certain types of loans are more flexible than others. Take a look at products and rates to match your needs here.
- You want to save for a large down payment – The truth: You need to remember that homes are likely to appreciate over time. For example, if you are trying to save up a large down payment based on a home that you saw listed for $200,000. At 3% appreciation over a 3-year time period, that home will be worth $218,545. Also, during those 3 years, your rent will likely increase. FHA loans may be able to allow you to make a down payment as low as 3.5%. It’s important to look at all angles before you decide on your timeline to reaching home ownership.
Ultimately, it’s your decision.
Buying a house is a long-term financial commitment and you should only make the move when you are fully comfortable doing so. There are plenty of valid reasons to prefer renting over buying. If you are wanting to buy but not sure where to start, opening a savings account for a down payment is a great first step.
Become a member and open a savings with Bridge. Click here to apply now.
Already have a down payment saved up? Click here to apply for a mortgage loan.
Have questions about mortgage loans? We promise a personal touch. We’ll guide you through the entire process and counsel you on the best product to fit your situation. Call our office today 800-434-7300 and enjoy a truly different experience.