Among the toughest choices for millennial renters is the decision to buy a home or continue to pay rent. The answer to this question lies in the priorities of the individual and the future goals they hold for themselves. If buying is a consideration, we recommend using a mortgage calculator before entering the market. This tool can help determine costs, compare rates and find the best solution. Beyond this equation Home Qualified’s Ralph DiBugnara has provided a list of questions to help determine if homeownership is for you.
What are my goals ? Does your 5-year plan include tying the knot or making babies? If so, your considerations should include moving to and buying property in a great school district or close to family.
Do I have any long term investments to secure my future? Paying rent is not an investment. There are many benefits to owning a home that can never be met by renting. Financial security, tax deductions, security and the avenue for retirement savings rank among the most powerful incentives. Furthermore, the equity built by owning a home can support refinancing, lines of credit, home equity loans and other financial means. These assets can be leveraged towards boosting property value or serve as emergency relief. As a homeowner, each mortgage payment represents a step closer to ownership and ultimately a burgeoning investment.
Where do I want to live? As discussed in earlier videos, it is sometimes difficult to afford a mortgage in a neighborhood you love or currently live in. Often times these neighborhoods offer more amenities at a higher cost of living. In this case the question becomes whether or not you prioritize lifestyle or life quality over the security of a long term investment. With the fluctuation of inflation, rents will always climb in price while mortgage payments for the most part remain steady.
Everyone’s answers to these questions will rely on several factors and the importance of stability versus sacrifice. We urge any of you out there renting or in the market to buy to sit down and weigh the pros and cons.