If you’re struggling over the decision of whether to buy a home or continue renting, you’re certainly not alone. The costs and process of purchasing your first home can be daunting. But it’s worth serious consideration, especially when you factor in the ever-increasing costs of rents these days coupled with mortgage rates being lower than they have in years. While it’s not currently considered a buyer’s market in most areas of the country, there are three major reasons why it’s still a very good time to purchase.
- Low mortgage rates
Interest rates for home loans are still remarkably low, which makes it a smart time to purchase. Additionally, lenders are accepting down payments as low as three percent for first-time homebuyers.
- Exorbitant rents
In many areas around the country, renters are forced to pay far more than a third of their monthly income on rent. Considering that in a recent article Yahoo stated “…housing experts consider consumers to be ‘rent-burdened’ if they pay more than 30% of their income on housing,” that fact can be a tough pill to swallow. Despite the acknowledgement that rent prices are excessive, a new report by Urban Institute researchers estimated that there will be 6.5 million new renters by 2025; a third of whom can count on being rent burdened.
- High price for limited options
Depending on what kind of home you buy and where you buy it, monthly mortgage payments can actually be less expensive than monthly rent payments. That realization can be disheartening for renters, many of whom struggle with the fact that instead of paying off their own investment every month, instead they’re helping their landlord get rich and/or pay off their real estate investment.
Another frustration renters often experience is that they are limited in the extent they can personalize their space. Many landlords discourage renters from making changes to their space, which can bewilder tenants since any investment on their behalf to improving the space has the potential to deliver future benefits to the landlord. Furthermore, homeowners have the ability to deduct mortgage interest and property taxes, which is a tax write-off that renters aren’t eligible for.
While no one will argue that it can be difficult to enter the housing market as a buyer, the rewards can well outweigh the risks and sacrifices involved. Renting does not give you equity in a home, but a smart real estate investment can deliver a healthy return in the long run.
For more information on the loan programs offered by Cliffco Mortgage Bankers, call us at (516) 408-7300 or contact us by filling out the form here.