Why You Shouldn’t Be Renting (At least For Too Long)

It’s a question that’s as old as time (or, at least, since the development of modern housing): to rent, or not to rent? Is home ownership more beneficial to me in the long run? Why rent when I can be paying down my own mortgage instead of a landlord’s?

For most, this question doesn’t have a black or white answer, since everyone’s situation is unique. There are, however, key benefits to home ownership vs simply renting.

Why Home Ownership?

With home ownership, your monthly payments go to your home’s equity. This is important because homes are appreciating assets and paying down your home earlier in life can set you up later down the line with less monthly overhead and payments. 

A fixed-rate mortgage also means that your monthly payments are not fluctuating, which is a common pitfall of renting where monthly rent can be adjusted or tweaked for inflation, the current market conditions, or for other reasons based on your landlord’s discretion. 

Home ownership typically means you are working towards some sort of financial freedom down the line, as paying off the big expense of a home means that you have freed up a significant amount of your income to spend on other things like travel, investing, your hobbies, dinners, or whatever else your heart desires.

Buying a home is also a great way to build up your credit so you are eligible for larger loans, or allowances that can only be possible with a healthy credit score.

All in all, a home is one of the largest purchases we can make in our lives, and paying it off quicker can mean fewer overall expenses down the line. 

When To Move Into Home Ownership

So now that we’ve gone over some of the many, standout benefits of home ownership, it’s also key to mention that if you are a young adult, or have just moved out there are some prerequisites that are recommended before you take the plunge and start looking for a house.

Here are some signs you are ready for home ownership.

• You have a great credit score already.
• Your monthly payments are less than 30% of your monthly income.
• You have a healthy balance in your savings account
• You can put 20% as a down payment, avoiding private mortgage insurance

If you are on board with some of the points made above, a home would be a great investment and could mean that you make the jump from renting to start building equity.

At LIFE Real Estate, we are the experts in assisting our clients get into their dream homes, while keeping in mind their financial situation and needs.

For more on how we can help you on your home ownership journey, reach out to our knowledgeable team.

For more information about what renting vs. owning looks like check out this helpful infographic and ask us what this means for you.