Examine The Rent or Buy a Home Question

It’s the perfect time to purchase a new home or refinance your current home to a lower rate.  So why are so many young professionals deciding to rent, instead of buying a home?  Three reasons: price, flexibility, and market distrust. Millenials are using these factors to decide to keep renting, but they may not be correct.  Let’s examine the rent or buy a home question.

First up is the price.  I understand that purchasing a new home can be terrifying.  It’s a scary process when you have to worry about your down payment, your mortgage payment, and the other bills that are associated with buying a new home.  It can seem easier to just pay in the first month, last month and your security deposit, right?  Well, that’s a really short-sighted view on the subject.  Purchasing a home at the current lower mortgage rates can actually let you have a lower monthly payment than rent in an average of two years.

Many millennials also prefer flexibility.  The ability to pivot quickly when the market changes is a trade-off for the security of knowing what your monthly payment will be for the next 15-30 years.  A lot of young professionals are jaded after being burned by all of the contracts that they end up in, from cell phone plans to student loans.  Many just don’t see the inherent value in owning their home instead of renting.  These preconceived notions about being bound into deals are blinding people to how much a home can help your bottom line.  Your home, if you make your payments on time and build equity in your home, is the best weapon that you have against rising debt.  There are tax breaks associated with home ownership.   Using a cash-out refinance or a debt consolidation can bail you out of debt problems. Getting a fixed-rate mortgage gives you cost certainty, versus the rising price of rent nationwide.  There is a lot of flexibility in knowing your payment, and being able to budget around it every month.

The last reason, market distrust, is obvious.  While the market has been steady for months, we are not that far away from the 2008 collapse, where many of these people either lost money or watched their parents do so.  This can naturally lead people not to trust that the market will continue to grow.  That’s healthy, though.  You never want to assume that the market will do ANYTHING, let alone bank on it.  What you CAN bank on, though, is a fixed-rate mortgage.  That lets you know exactly what you’re going to pay every month for the next 30-years.  Locking into a fixed-rate mortgage lets you ride out changes in the housing market with confidence.

Once you decide you’re ready to get off of the rent train, call us in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515 or Nashville at (615) 810-8555. You can always apply online at www.thehomeloanexpert.com, and we’re also open on Saturdays to better serve you. We work hard to make it easy on you.  Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?

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