At Primary Residential Mortgage in Fort Meyers, we’re here to help with every step of your new home purchase. Our home loan programs will get you and your family in your perfect home regardless of credit or other factors.
One question we often hear from prospective buyers: Should I buy, or should I rent? We obviously have a bias here, but as you’ll see, the numbers definitely favor buying when all else is equal. Let’s look at these numbers, and some of the advantages of buying over renting.
A recent study of the US’s top 100 metropolitan areas found that homeowners came out far ahead of renters over a seven-year period with similar conditions. When accounting for average mortgage payments, home values and rent, homeowners spend 33 percent less than renters when it comes to housing expenses. That’s assuming a relatively standard 30-year mortgage with a normal down payment – if you have great credit and get a good deal, you could come out ahead by even more.
And in certain cities, this is common. Owners come out ahead of renters by up to 50 percent in some cities, though to be fair, there are others where the rental side comes close to even.
Much of this discrepancy is due to low interest rates on home loans, which keep borrowing costs down. Home values then climb over the life of the ownership, which becomes home equity that benefits the owner. By the time an owner is looking to sell, they could be looking at quite the profit.
Know that this data has a few caveats. For one, owning only beats rending if buyers can find an affordable home – as demand rises, this could be difficult in some markets. The most affordable segments of the housing market are naturally the toughest to buy into. In addition, not everyone has the funds available to put down the up-front costs associated with buying. If you do have such funds, however, and if you can find an affordable location, it’s almost always best to buy.
Want to learn more, or figure out whether you should buy or rent? Speak to the mortgage brokers at Primary Residential Mortgage today.
*The views and opinions expressed are my own and do not necessarily represent the official policy or position of Primary Residential Mortgage, Inc.