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There are times when renting can be a better option than buying a house. For example, if you’re relocating to a new area in a hurry, it might be wise to find a rental property and get to know the new area before you commit to buying a house in a place you’re not yet familiar with. Renting might also be a better option when you’re certain you won’t be in one place for long. Beyond those situations, however, buying a house is often a better choice, economically. Consider these three reasons why home ownership is more cost-effective than renting.
Visit UFCU.org or give us a call at (512) 997-4663 (HOME) for a free, no-pressure mortgage loan consultation. You can also visit your local financial center anytime to chat with a Personal Financial Representative or apply online now.
You Get More for Your Money
In 2015, home values increased by an average of 10% in the Austin market — meaning home buyers (including first-time home buyers) saw an average 10% return on their investment in only one year. Plus, depending on what type of mortgage loan you take out, your payment will remain relatively unchanged over the term of your loan (assuming a fixed interest rate). Most mortgage lenders today work hard to provide low-rate mortgages and simplify the home loan process, even when you’re buying your first home. When you rent, your rent can increase year after year depending on your landlord (although the benefit is that you don’t have to pay for upkeep).
You Can Set Down Roots
Owning a home can be empowering and emotionally rewarding. The money you spend on your mortgage every month and improving your home yields a long-term investment benefit for you instead of a landlord. When you rent a property, you don’t receive any equity for your investment and you don’t have the pride of calling your home your own. Say goodbye to neutral walls and ugly carpet. When your home belongs to you, you can enjoy making each part of it fit your style.
Watch this video to hear what Laurie Roberts, UFCU Sr Vice President and Chief Lending Officer, has to say about buying vs renting.
You Have a Financial Investment
For most people, their home is one of their largest financial investments and makes up a big portion of their overall net worth. So at the end of your 15- or 30-year mortgage, you will own your home free and clear and it will (hopefully) have increased in value over time. At that point, if you decide to sell your home, you stand to earn a profit that you could then roll into another home. As a renter, you don’t build equity over the long term and if you leave, you don’t get to take any profits with you.
Make Sure the Time is Right
Ultimately, these three benefits of home ownership are great, but owning a home still might not be the right decision for everyone. Buying a home requires a certain level of financial and emotional stability. Before you take the plunge, make sure the time is right for you and your situation. There can be times when renting does make more sense, depending on your life stage. However, when you’re ready to settle down for the long-term, buying a home is often a wise choice.