Most renters struggle with the decision to purchase a home if they are uncomfortable with the idea of paying a mortgage. However, there is little difference between paying for your own mortgage and paying for your landlordâ€™s mortgage. Renters should take this into consideration when deciding between renting and buying, as they will always be paying for a mortgage unless they live rent-free.
Harvard University at the Joint Center for Housing Studies proposed:
â€œHouseholds must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. Thatâ€™s yet another reason owning often doesâ€”as Americans intuitâ€”end up making more financial sense than renting.â€
Head of Single â€“ Family Sales & Relationship Management, a Senior Vice President at Freddie Mac, Christina Boyle further emphasized the security of a personal mortgage vs. paying rent:
â€œWith a 30-year fixed rate mortgage, youâ€™ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years â€“ unlike rents which will continue to rise over the next three decades.â€
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The mortgage payments you collect serve as â€œforced savingsâ€ that prepare you for the equity payments that will occur for. A guarantee that secures every landlord of their equity comes from their renters.
The graph below explains the gap, which separates the net worth of a renter vs. a homeowner:
More than ever, it makes more sense to be a homeowner than to rent over a long period. Whether youâ€™re looking for a primary residence or a vacation home, buying will be more advantageous especially in todayâ€™s market. Looking to buy? We can help you find Homes for Sale in the Charlotte area. Our friendly team would be happy to answer any questions and assist you every step of the way.
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