One of the most common objections I hear from renters on why they haven’t purchased yet is because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize, however, that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As Entrepreneur Magazine, explained in their article, “12 Practical Steps to Getting Rich”:
“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”
Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage as opposed to paying rent:
“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”
Lets talk about what a realistic purchase looks like and where you’d be in 5 years if you purchased a $250,000 property today. Over the next five years lets say you don’t remodel or do anything to update this property. Instead, you just live in it, take good care of it, pay the mortgage (most of my clients’ mortgages are below their rents for the same sapace), and have pride of homeownership. It is estimated that you’d make $44,905 based soley on increased home equity.
The way I look at this is if I were to see you in 5 years and ask aren’t you so glad you bought that home in 2018? You’d most likely respond with an “Oh my gosh I am SO glad! I’m going to be able to use that additional home equity to purchase my next larger home.” Now doesn’t it sound smart to get out there and start looking for a home to buy? Lets get to it!