To Rent or to Buy, That is the Question!

June 12, 2012 in Buyer's Handbook, Real Estate 411, Seattle Buyer's Guide

Seattle HomeIn the pursuit of a new home, you have to lay out your options and decide on which road to take to maximize your benefits and meet your needs. When it comes to choosing whether to rent or buy your next home, there are several things to take into consideration.

One of the convenient things about renting a home is that it gives you the ability to move again as soon as your lease is up without having to wait for your house to sell, as you would if you had purchased a home. Owning your own home, however, allows you to the freedom from a landlord and a lease which can be ended at the landlord’s discretion, forcing you to leave your home. While landlords are mainly responsible for property maintenance costs, in owning your home you have the leisure of remodeling as you please. This also builds equity for you as a homeowner, benefiting you in the long run.  Also, it’s hard to feel good about spending money to make improvements, even something as simple as adding a fruit tree to the garden or great drawer pulls in the kitchen, if you are using your money to improve someone else’s property.  That can leave you always a little less than satisfied with your surroundings.

Not only does your monthly mortgage you pay in owning your home cover the cost of where you are living, it also acts as a huge investment. You generally are Character Home in Seattleinvesting 10% of the cost of the mortgage and the bank covers the other 90% while you reap 100% of the benefits. Owning a home also allows you to deduct tax on the interest you pay on your mortgage and also on your property taxes. When and if you decide to sell your home in the future, you are exempt from paying taxes on the money you gain from the sale of your home. In paying your mortgage you can choose a fixed monthly rate from which you enjoy stability, whereas in renting a home you will most likely experience several rent increases over the years.

Whether you’re making long term or short term decisions, there are options that will allow you to make things happen to meet your needs. To make America strong it has long been the policy in this country to Home in Ballardmake it financially favorable to own your own home (which is one reason why the mortgage rates for your primary residence are lower than for a second home). When thinking historically over time, real estate has risen to the point where we can’t even believe the microscopic sums our parents paid for their homes 30 years ago!  With the tax benefits and the historically low mortgage rates, it is very advisable to consider purchasing at this time.  For a list of lenders who will be glad to talk over scenarios with you , check my lenders info page.  Many of my clients are surprised at this time to find that their mortgage, even with tax and insurance added in, costs less per month than their current rental payment!