Is it Time to Stop Renting and Purchase a Home?

June 2, 2015 7:47 pm

434_3008983-8Are you currently renting a home and wondering if you should make the transition to buy? As mortgage rates continue to be low, it is proving to be more economical in many cases to purchase a home rather than continue renting. Not only is buying an investment in your future, but you will see a real return on your money instead of lining your landlord’s pocket.

When considering your options, ask yourself this question- where do you want be in three years? Stan Humphries, Chief Economist of Zillow said,

“Everyone understands if you’re going to be in a house 20 years, you should buy a house and if you’re going to be in a house for six months, you should rent it. What they don’t understand is when those two lines cross.”

Humphries refers to that point as the “Breakeven Horizon”. That is the gray area where consumers have to decide when the accumulated costs of renting exceed those of purchasing. With mortgage rates nationally at a very low level, that time period is only about two and a half years.

Still on the fence about whether to rent or own? Another thing to consider is that homeowners 76_4872515-3experience tax benefits that renters do not because a significant portion of the mortgage interest and property tax paid is deductible. In addition, consider your equity. When you pay rent, you are essentially paying your landlords mortgage or adding equity to his or her bank account. If you have your own mortgage however, you increase your degree of ownership with every payment.

Call me today to set up a meeting so we can look at your buying options.