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7 Reasons To Stop Renting Today  7 Reasons To Stop Renting Today


7 Reasons To Stop Renting Today

Written By: Jaymi Naciri
Thursday, August 3, 2017

Still renting? You must have a good reason. Although, were not really sure what it is. With rents continuing to rise across the country, interest rates staying around historic levels, and new loans lowering down payment requirements, it just makes sense to take the leap to homeownership. Maybe youve got terrible credit and dont want to take the time to improve it or dont know about loans that accept lower scores? Or, maybe you just like giving your money away. If youre still not on board, these 7 reasons might change your mind.

Because owning a home is still less expensive than renting across the country

GOBankingRates annual survey of "the cost of renting versus owning a home in all 50 states and the District of Columbia" just came out, and, while they "found that the number of places where its more expensive to own than rent has increased," the number went from 9 to 11. That means that, in 39 states, it still makes more financial sense to buy.

Rates are near historic lows

Were spoiled. Seriously. Anyone who has been paying attention to the market over the last few years and has seen interest rates with a 3 or 4 before that decimal point may just think itll always be that way. But history has a way of repeating itself, and while we may not see rates in the teens again anytime soon, most industry experts have been predicting rates moving into the 5s sometime this year, with a pattern of rising rates beyond. Buying a home while money is cheap is a smart move.

"A difference of even 1 percent can have a major impact on your total payments over time," said ZACKS. "For instance, a 200,000 mortgage for 30 years at an interest rate of 5 percent would require a monthly payment of 1,073.64. By comparison, the same mortgage at 4 percent interest would result in a payment of 954.83." That might not seem like a big deal every month, but, consider the long-term potential: "Over 30 years, the total difference between the two would be 42,771.60."

FHA loans and the like make it easier to qualify

Dont have an 800 credit score? You dont need to today. FHA requirements are lower than conventional loans, and you may already be where you need to be to qualify. "The average FICO score for buyers who finance FHA loans is 683, according to Ellie Mae. Thats considerably lower than the average score of 753 for conventional, non-FHA financing," said Interest.com. "Most lenders have a...minimum of 600."

A little thing called equity

Rising rents may or may not equate to rising property values in your area, but either way, youre not going see any financial benefit from it. When you own your home and your equity rises, that equity is yours. And so is the choice of what to do with it. Whether you decide to let it sit and continue to grow or tap your equity for home improvement projects, the money is yours to decide how to use.


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The days of the 20 percent down payment are all but gone

Does 20 percent down make it more likely that youll qualify for a loan? Sure. Does that mean you have to come up with that huge chunk of money? No. Nor do you have to come up with 10 percent down, which, for some reason, the majority of new buyers seem to believe. "87 offirst-time buyers think they need 10 or more down to buy a home," said The Mortgage Reports.

TheFHA loanis one of the most popular loans available to first-time buyers because, not only can you qualify with a fair credit score, but the down payment is as low as 3.5 percent, and, "100 percent of the down payment can be a financial gift from a >Rents keep rising

Unless youre in a rent-controlled apartment and, bless you if you are since there are so few left, your rent is just going to keep going up every year. Apartment Lists monthly NationalApartment ListRent Report shows that, "Our national rent index is continuing to climb, with month-over-month growth of 0.5 percent for June. Rents grew at a rate of 0.5 percent between May and June,which is generally in line with the monthly growth that weve seen over the course of this year thus far. Year-over-year growth at the national level currently stands at 2.9 percent, surpassingthe 2.6 percent rate from this time last year.In addition to the growth on the national level, rents are now increasing in nearly all of the nations biggest markets."

When you own your home, your payment is your payment is your payment. Unless you take out a home equity loan or refinance to take cash out, your payments not going to go up.

Tax breaks

Heres another bit of fun for renters: nothing you pay comes back to you. I mean, except for that security deposit, but that all depends on what effect your dog and those few parties you threw had on the condition of the home. As a homeowner, you get to write off all kinds of stuff, which lowers your overall costs. "Your biggest tax break is reflected in the house payment you make each month since, for most homeowners, the bulk of that check goes toward interest. And all that interest is deductible," said Bankrate. "Did you pay points to get a better rate on any of your various home loans? They offer a tax break, too.The other major deduction in connection with your home is property taxes."

And think about it this way: Even if your house payment is going to be a little bit higher than what youre currently paying in rent, its not an apples-to-apples comparison. How do those numbers look when you calculate the tax savings?



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