February 21, 2019
How much money do you spend renting a home instead of owning one? If you count the security deposit, any applicable pet deposit, and other expenses, the numbers can add up quickly.
When you rent a home instead of buying real estate with a mortgage loan, you are also stuck with whatever appliances your landlord has seen fit to install in the home, regardless of quality. You have to live with someone else’s interior design and paint scheme preferences, and chances are the carpet is not what you would have chosen…at all.
Renting A Home: Where Are The Long-Term Financial Benefits Compared to Home Ownership?
When you rent, you get no equity, no cash-out refinance loan option, and no ability to sell the home at a higher price than you paid for it when the housing market favors your area.
When you buy a home with an FHA mortgage loan, you invest your money in property that grows equity as your loan principal is paid down, you have the ability to refinance with cash out, and you can even generate income with your property by renting out unused living units.
Rising property values are also a factor in the value of your real estate. A borrower who has a home appraised at a certain value before purchasing may be surprised to find the value has increased more than they realize when the home is appraised again. In times when market conditions have property values going up, this can be a huge advantage.
Freedom to Renovate, Remodel, Repair at Your Convenience When You Own Your Home
Owning your home gives you the the freedom to improve, remodel, replace carpet and paint jobs, etc. Owning your home means no asking for permission to do any of these things from a landlord or rental agency.
What Makes The FHA Loan Option More Affordable?
The FHA loan minimum down payment is 3.5% for those who qualify for maximum financing. What’s more, there may be down payment assistance from a program in your area.
Those buying a home with an FHA mortgage loan can negotiate with the seller to fund approved closing costs for as much as six percent of the home’s sale price.
Owning instead of renting makes sense. Borrowers who plan to stay in the new home long-term should ask the lender about discount points to lower the overall cost of the loan and consider paying closing costs up front. This can help keep your mortgage payments lower and save you money over the course of the 15-year or 30-year mortgage.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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