8 great reasons to buy a home instead of rent
“This is how much you’re going to pay per month on a mortgage.”
Now hold up a mirror. See the surprised look on your face? That’s the result of realizing you could be the proud new owner of a house for less than what you’re currently paying to rent. Why not have the money you are spending now go toward building equity and working for you?
The barriers to homeownership aren’t what they used to be. In the 1970s, you couldn’t buy a home without a 20 percent down payment. Today, the essence of the American dream often can be achieved with little or no money down depending on your financial situation, where you’re buying a home or if you have a special qualification, such as you’re buying a rural property, you’re a veteran or you’re in specific career categories like an educator. Private mortgage insurance also expanded who could qualify for homeownership. With interest rates still near historic lows, it’s a great time to think about becoming a homeowner.
In fact, here are eight reasons that you should consider in your decision:
Your property, your choice. You don’t have anyone telling you that you can’t paint the walls, hang things up, or have certain types of pets. If you buy, you can do all those things and be as creative as you like.
It can be a great investment. The housing market crash of 2008 was tough on homeowners, who lost an average of 32 percent of their home value. But the market has rebounded in a big way since. In 2016, the median price of a single-family home was up 6.9 percent from the prior year (5.7 percent in the Midwest), and buyers are flooding the market. Homes are drawing multiple bids, and some are going into contract even before they’re advertised. The housing stock is shrinking, and prices are expected to go up another 7 to 8 percent by the end of 2017. Every region, city or side of town can have a different experience, but historically a home has been a solid investment. It’s one you can use rather than just own and it’s an asset you can enhance to add even more value.
There are tax advantages. If you itemize your taxes, rather than take a standard deduction, you can deduct the mortgage interest and property taxes you pay annually. When you factor that in, it can make owning a home on par with or lower than renting. Consult a tax professional to see if you qualify for these deductions.
You’re routinely saving. Because your house is an asset, every payment you make toward principal is like sending money to yourself. Even if you haven’t paid off the mortgage, you’re building up equity. You also can borrow against that equity if you ever need to for an emergency or, for example, to pay for a once-in-a-lifetime trip. With rent, you get a roof over your head, but compared with buying a home, you’re losing out on having your money work for you.
Interest rates are (still) historically low. Just over 30 years ago, mortgage interest rates on a 30-year fixed loan were between 12 and 13 percent. As recently as 2007 they were pushing 7 percent. For the past seven years they’ve generally hovered around 4.5 percent or less. It’s a wonderful time to be a homeowner in terms of what it will cost you over the life of a loan to purchase your next home.
Your community connections increase. Renting can make it feel like temporary residency. When you buy a home, you’re laying down roots and making a commitment to being part of the community. You get to know your neighbors and create ties that you might not otherwise.
Your privacy improves. When buying a single-family home, it’s nice when the strange noises, loud conversations and annoying music from the apartment next door at all times of the day or night become a thing of the past. If you’re purchasing a duplex or a condominium, you’re only sharing one wall instead of potentially worrying about the neighbors above or below you.
Buying in Ohio beats renting. If you’re looking for a median-priced three-bedroom home in the Buckeye state, chances are your income will go further if you buy instead of rent. According to the 2017 Rental Affordability Report by RealtyTrac, of the 24 counties researched in Ohio, 22 drew buy instead of rent recommendations. Even if you’re looking outside Ohio, buying is better: 66 percent of the nation’s counties have a more favorable ownership climate.
All pretty good reasons, right? Do you still have questions? When you work with our experienced lenders at Park National Bank, you don’t need to know the exact home you want to have a conversation with us. We want to get to know you and understand what homeownership means to you. Then we can offer you information and trustworthy advice based on generations of providing mortgages to the local community, so you can feel confident you’re making an informed decision.
Call or visit us today so we can give your unique situation the personal attention it deserves.