Renting an apartment or home is a beneficial living arrangement for some people. If you don’t plan on staying in one location, are not financially stable or don’t want to be responsible for maintaining your own property, then renting is a good choice. However, for most people, there comes a time when owning your own home makes more sense than renting.
There are many benefits to owning a home over renting, such as lower monthly payments, security and easier financial planning, and the ability to accrue long-term equity in the property. Owning your own home also lets you make changes to your property to suit your lifestyle. Learn when and why it’s time to become a homeowner and settle into a beautiful house in James Island, South Carolina.
Comfort and Security
If you are looking for comfort and security, it may be time for you to buy a house. Renting an apartment is suitable in the short term, but there is always the possibility of a change in management or rental property owner’s situation. Complexes raise rates without warning, and homeowners who rent their homes sometimes make quick decisions that leave renters scrambling for other options.
When you own your own home, you can rest assured your living situation isn’t affected by someone else. When you sign a mortgage contract, you can lock in a fixed interest rate with the lender; therefore, you don’t have to worry your payment will suddenly increase. Additionally, most mortgages are for 15 to 30 years, so you can settle into your home and make it your own unless you choose to move and sell.
Lower Monthly Payments
Although cheap rent-controlled houses and apartments exist, most decent rental properties can cost over a thousand dollars per month. When you add in utilities and other living costs, you end up paying a significant amount of money for a small living space that isn’t actually yours. Buying a house may have an intimidating initial price tag, but it almost always proves to be the better deal when you break down the long-term cost savings.
One element of the cost-saving benefit of buying a home is that monthly mortgage payments are often much lower than those for a rental unit. Because mortgages are spread out over a long period, you pay less monthly for a house than for an apartment. This gives you more money to budget with easing financial pressure. In addition, you can live in a larger space that is yours while paying less than you paid to rent a few hundred square feet.
Easier Financial Planning
With apartment living, not only do you have to be aware of the possibility rent can be raised at any time, but if you decide to move or the renter decides to quit renting, you have to readjust your financial plan for the short and long term. Financial planning is difficult when your biggest expense is up in the air or expected to change within a year or two’s time.
When you buy a home, financial planning becomes easy and can even be projected for the years ahead. Although situations may change or your homeowner’s insurance and taxes rates may fluctuate, you can reasonably predict what your home expenses will be in the future. With a fixed interest rate, your mortgage rate is locked in, and the principal you owe is static throughout the life of the loan. This allows you to plan bigger purchases or grow your family with a solid financial plan that gives you peace of mind and stability. You can even make double payments to pay off your principal sooner and increase your equity and wealth.
You can also deduct the interest payment and property taxes from your taxes, lower what you owe Uncle Sam each year and keep more of your hard-earned money.
When you rent a property, you don’t earn any equity. That is to say, you don’t build up any interest or value in the property; you pay for space and nothing else. When the rental agreement comes to an end, you pack up your things and go somewhere else, with nothing to show for all the money you’ve paid. This is the least attractive part of continuing to rent rather than buying a home for many people.
When you become a homeowner, you begin to earn long-term equity in your home. Home equity is the market value of your home minus any outstanding liens. If you purchased your home with a mortgage, this means that on whatever portion of the loan you’ve paid off, you have earned equity. The longer you pay on your loan, the more equity you have in your property.
Home equity can be used to get a home equity loan, which you can use to renovate the property or grow your long-term wealth. Buying a home in a stylish neighborhood like Old Village Mount Pleasant, where home values are high, means you can expect to earn substantial equity in your home.
How Do You Know if You’re Ready to Buy?
In addition to considering all the benefits of buying a home, it is important to ask yourself a few questions to ensure you’re ready to own a home. Assess where you are at in the following areas:
● Life Readiness
If you have a secure job, are ready to put down your roots and call one place home, are considering starting a family, have always dreamed of owning your own house and have the time and ability to maintain a house, then you are probably at a stage in your life where you are ready to buy a home. It is a great time to get in touch with a local real estate agent and start looking at your options.
● Financial Readiness
Financial readiness refers to your financial situation and whether it is a good idea to invest in a home from an economic standpoint. Being financially prepared means you have a good credit score and a low debt-to-income ratio, and that you can put a down payment toward the purchase of your home. It also means you’ve calculated the total cost of buying a home and have a budget that can easily accommodate the expenses.
Time to Start Searching
While there are situations that make renting a home or apartment a helpful arrangement, it is almost always a waste of money in the long run. Changing rental rates, the high cost of apartment living and the restrictions to your privacy and ability to customize your living space make rental situations less than ideal for most people looking for more stable arrangements.
With all the benefits of owning your own home, like lower monthly payments, earning long-term equity and having the peace and security living in your own property brings, it is smart to start searching for your dream home.