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Why a Mortgage Is Better Than Renting

It seems like a simple question – would you rather own your property or pay someone else to use it for a while?  A mortgage payment is an investment in yourself, and renting is an investment in someone else’s property.  Renting is just pouring money down a drain, and you are just wasting your money and time.  A mortgage is a way to put your money towards building your personal wealth, and that’s why a mortgage is better than renting.

When you have a mortgage, you have a bet on yourself.  It’s the best way to put away assets and increase your overall wealth and financial well-being.

Mortgages are the path to retirement, as well.  They are a long-term asset that let you improve your financial health every year and give you an opportunity to own a large financial asset that will be with you forever.

Homes tend to increase in value.  Not every home does, of course.  If you let your home fall apart, or you stay in a neighborhood that declines, your home may not gain in value.  However, most homes, especially in housing markets like today, are increasing rapidly in value.

Homes are worth more today than they have been in 10 years, and that’s not a fluke.

Housing Scarcity Leads to Value

The market for homes is tight, right now.  It’s a relic of the housing market after the 2008 collapse, where builders grew skittish at the prospect of having empty houses and cut back dramatically on building, even abandoning some projects entirely.

This means that the scarcity of product has made the available homes more valuable.  It also means that if you are going to buy a home right now, you may pay a little more and have competition for your home.  That’s a good thing, though.

Competition breeds success, and the housing market is no different.  If you buy a home now, you’re looking at an ascending asset.  Homeowners are making money in equity EVERY DAY, with their home values skyrocketing.  This wealth increase is what fuels Cash-Out Refinances, Home Improvement Loans, and the ability to sell your home at a profit and move to a larger home.

Don’t be put off by the prices of homes.  You’re getting an increasing value every day in this market.

Why Buy a House When You Can Rent?

With rents going up every year in some cities, the waste is just getting worse.  Rent is just throwing money down a well, putting off starting to build your own wealth through home ownership.  Why buy a house when you can rent?  WHY RENT IF YOU CAN BUY A HOUSE?

Owning a home puts you into a new bracket, financially.

According to Rentcafe, rents have risen nationally to an all-time high, and it’s only going to get worse.  You can count on rent pushing higher because the demand for housing isn’t going to decrease.  Don’t get caught in the cycle of paying rent.  Renting increases can also hurt your ability to save up for a down payment and buy a home.

Should You Buy a House Now?

Yes.  Absolutely.  There has never been a better time to buy a house, with values rising quickly and interest rates staying near all-time lows.

Financially, you should make sure that you have a few things covered, though.

Can you afford a down payment?  There are a lot of different programs to use when you are buying a home.  Conventional loans need a 20% down payment.  FHA Loans require 3.5% down.  VA Loans, like Hero.Loan, require no money down.  It’s all dependent on your financial situation.

Can you afford the monthly payments, and your expenses, and still have money left over?  Do your homework.  Look at your bills and start to figure out if you can really afford to buy this house.  Gather up what you pay every month and a calculator and really dig in.  Will your budget be stretched, or broken?

Do you have enough savings to do maintenance and make repairs?  When it’s your house, it’s on you to make repairs.  Will you be able to afford it?  As a very broad rule of thumb, you should budget 1 percent of the home’s purchase price annually for repairs and maintenance. For example: If your home is worth $300,000, set aside $3,000 per year, or $250 per month. It’s likely that you aren’t going to spend this every month, but will spend it in a big chunk, when you need a new fridge or a water heater.  Be prepared.

Which Is Better: Buy a House or Rent?

Buying a home is always going to be a better deal than renting.  Rent is just a constant dump of money, while owning a home is a bet on yourself.  Don’t bet on a landlord.

Call The Home Loan Expert Team in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515, Nashville at (615) 810-8555 or Birmingham, AL at (205)721-7656.  You can always apply online at hero.loan for your VA Loan, and www.thehomeloanexpert.com for your other mortgage needs, and we’re also open on Saturdays and will come to you to help close your loan. 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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