It’s no secret that home prices are on the rise. This might be the reason most renters are fearful to become a homeowner. However, instead of signing a lease and paying a landlord each month, it is smart to consider your options when it comes to your living situation. Purchasing a house could be the best decision in today’s market.
Living somewhere that you can call your own
When owning a home, you have the choice to completely customize your living space. Whether it be remodeling the floors, revamping a bathroom or even changing the lighting. Oftentimes when renting, you do not have the choice to make certain changes without contacting the property owner or apartment management. Not only can you personalize your home, you also have the chance to raise the value.
You can obtain cash just by being a homeowner
When buying a home, you are putting money toward the equity in the home you own. This is a great way to invest in your future. If you decide to purchase a new home, consider how long you plan to live in it. When the market value of your house exceeds what you invested into the home, you are making much more than what you spent. This also depends on the time you decide to sell. Even if you are not going to sell your home, renting it out to others can also be a good option for you to make some money.
A cash-out refinance can help pay for home renovations. By taking advantage of a cash-out refinance, you can even consolidate high-interest credit card debt or pay off lingering student loans. The longer you are in your house and the more home prices rise, the more cash you will have available to you. Your home can be your own personal safe; the money you build up in equity will be there whenever you need it.
Rent prices are constantly changing
While home prices are indeed on the rise, a benefit of purchasing is that you are able to lock in your rate for a fixed amount of time. When renting, you are paying much more in the long-run because there is no investment towards your future. Jason Vondrak, President of Prospect Financial Group says,
“With rents increasing at such an alarming pace, especially in Southern CA, buying a home is starting to be the clear choice for anyone that can afford it. There are so many factors to consider when choosing whether to buy or rent, but one of the most important factors that often goes overlooked, is the fact that you typically can’t lock in your rental rate for 30 years, like you can a mortgage. Rental rates in San Diego County increased almost 10 percent last year. It is a growing concern for prospective first-time home buyers and the reason many are buying a home with a fixed-rate mortgage this year. ”
You as a buyer do not have to keep paying an increased rental rate; renters often must re-locate several times, especially if their rent keeps increasing each year. With a fixed mortgage rate, you don’t have to worry about finding a way to pay the extra money each month. It is nice to know that what you are paying will not change for a fixed period of time.
There are many options when it comes to where you decide to live. Considering all options is the best choice if saving money is a priority.