Are you a current renter considering buying?
According to the U.S. Census Bureau, the national homeownership rate in the first quarter of 2022 was 65.4 percent — meaning about two-thirds of Americans are homeowners.
You’ve probably thought about eventually purchasing your own home if you’re a renter. There can be many perks to becoming a homeowner, from having more control over your space to building equity and potentially benefiting from rising home values. It also might be one of the most significant financial commitments you’ll ever make. At GoVA, we want to ensure your homeownership path is as smooth as possible.
Let’s take a look at some renting and home buying facts:
Rental prices continue to increase.
The cost of rent has increased at a high-speed rate throughout the country. This trend has no sign of stopping. These rent increases can be even steeper depending on the area in which you live.
Homeownership is an excellent long-term investment.
One of the most compelling reasons to buy is the realtor’s mantra: Why throw away money on rent when you can buy a home? Homeownership is an excellent investment because it’s a method of forced savings. When you buy a home with a 30-year mortgage and make monthly payments, you will own a home to sell at the end. However, if you rent a property for 30 years, you won’t get any of your monthly rent payments back.
Here are some additional pros of homeownership:
- Customizing Your Living Space – Do you want a vegetable garden or fun floral wallpaper? Have at it!
- Community Involvement – Homeownership goes hand-in-hand with voting, school volunteering, and general civic roots. Establishing roots is a little easier for some homeowners.
- Pride of Ownership – Ever been on a home tour in an apartment complex? Not very likely. Renting a place can feel temporary, but ownership often fosters a sense of pride.
Weigh your risks.
There are risks for both renting and buying a home to keep in mind. Although you can build equity when purchasing a home, there are some financial risks. For example, if you sell your house sooner than planned, you may not be able to make up for what you spent on closing costs or renovations.
On the flip side, renting means you won’t have the opportunity to build equity wealth. Your monthly rent could go up at any given moment. You’re also at the mercy of your landlord, such as being asked to move out or dealing with maintenance requests being deferred.
Assess your financial situation.
It’s important to note that you must be realistic about your financial situation when deciding to move from renting to buying. Once you estimate the costs of renting versus buying, be honest about whether you can afford other upfront costs like a down payment, repairs, moving expenses, and buying new furniture. In either case, do some careful budgeting so no matter what you choose, you’ll be able to afford to buy or rent.
What does your gut say?
Ask yourself if you feel ready for the level of commitment that owning a home entails. If being on the hook when the basement floods or the roof leaks terrifies you, it could be you’re not quite there yet. On the other hand, if you know you want to put down more permanent roots, you might be ready to take the next step. Homeownership brings both tangible and intangible benefits. Not only do you have your own home, you can make decisions about the look and design of the space, but you also get a sense of stability and pride of ownership.
We’re here for you.
Our team combines today’s technology with the personal guidance needed during the mortgage process, allowing for a smooth transaction and on-time closing.
Are you a member of the military community? If so, you’ve earned VA loan benefits, and the GoVA team is committed to being your partner on the path to homeownership. You served for us, let us work for you.
Would you like to better understand your options? Contact us for a free consultation and we’ll help you make the best decision for you and your family.