If you are currently renting a house, you might be wondering if you should buy. There are some people who can't yet buy a house who rent, but if you are renting a house by choice rather than buying, you might be doing yourself a disfavor. Of course, each situation must be looked at individually, but in the vast majority of cases, buying a house is a much better option. Here are some reasons you should purchase a house.
1. You Get Equity When You Purchase a House
Even though purchasing a house can be a risk, it also is one of the best investments you can have. Each month you pay your mortgage you are building equity in the house. Of course, there is a large amount of the first payments that are interest, but over the years, you will begin to have a good investment in your house. Then if down the road you need income you can use your home equity, through a home equity loan. For example, some people use the equity in their home to help with retirement. Or you can simply sell your home, take the cash, downsize to a smaller apartment when you retire, and use the money for living expenses.
If you were to rent for all this time you would simply be without any investments and any equity.
2. You Have More Predictability in Your Budget
Another great thing about buying a house is that you can guarantee the mortgage payment each month. For example, if you get a fixed loan on the house, which is the most common, the interest will not change for the life of the loan. This means that every month you can predict exactly how much you will spend in housing.
If you rent you can only guarantee the price of the house for the duration of the contract, which is usually only a year or two. This means that your landlord can increase the price of rent and you will either have to pay it or move out. With a home loan, you won't have to worry about being without housing because of an increase in price.
As you can see, buying a house is generally the better choice. Even though it can seem like a big expense in the beginning, with the down payment, closing costs and so forth, in the long run it will be the best for your budget.Share