GET WEALTHIER QUICKER, BUY THAT HOUSE NOW

Rent or Buy: Either Way You’re Paying A Mortgage | Keeping Current Matters

Like the fellow says, “We all gotta live someplace” and if you live indoors, you are either paying rent or making monthly payments on a mortgage.

Well here is a powerful fact that not too many people understand. For the same amount you are paying in rent, you can probably qualify for a mortgage and start building your net worth. Just look at the graphs below and decide that you need to get into that homeowner group and get wealthy a lot quicker.

There are some renters that have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains:

“Households 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.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. 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.”

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

The graph below shows the widening gap in net worth between a homeowner and a renter:

Rent or Buy: Either Way You’re Paying A Mortgage | Keeping Current Matters

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.

LIKE MORE INFORMATION, CALL OR TEXT  484-574-4088 OR CLICK ON THE CLICK TO TALK TO ME BUTTON ON  THE SITE.

 

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