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Health & Fitness

Why Owning is Better Than Renting

I often have this discussion with first time home buyers but I have also had the conversation with executives who transfer into our area.  Of course each individual situation is unique and no one answer fits everyone but here are the top reasons that owning is a smart choice than renting:

·         Mortgage rates are low

Yes rates have inched up in the past year or so but they are still historically low!  The reason this point is so very important in our discussion today is that it is actually cheaper on a monthly basis to own a home than to rent.  Typically your monthly payment as a homeowner will be at least one hundred dollars less than if you were renting the same home. 

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·         Your home, your choices

Want a dog?  Want to paint your baby daughter’s bedroom neon pink? Want to remodel the kitchen? Well if you are a renter those options are not of your choosing, especially if you are remodeling – just try to get a building permit for a home you don’t own!  If you are a homeowner you can get that permit and paint that room and not need to ask permission, this is one of the best reasons to be buy a home of your own. 

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·         Credit

Yes you need to have good credit to buy a home, but remember mortgage companies always report to the credit bureaus and landlord or rental agency will not.  There are few items on a credit report that demonstrate financial responsibility and over-all stability in life better than a long history of on-time mortgage payments.  

·         Equity

When you are a homeowner you build equity, and having that equity to tap into if necessary is a big plus for homeowners.  If you go to a bank for a loan to buy a boat or a new car or to make home improvements and have $75,000 in equity in your home they are more likely to give you then loan!   Renters do not build equity for themselves! 

·         Your Financial Health

Let’s say you purchase a $200,000 home, you put down $40,000, your interest rate is 4.5%, your monthly payments will be around $800 – you make those payments for 30 years and you own the home free & clear.  Hopefully it has appreciated significantly in value. 

If you are a renter and you are paying about $800 a month for your rent then at the end of 30 years you have paid a total of $291,852 – this of course assumes that your rental payment never increases over the 30 years.  Not likely!  But you can see the difference in money spent over the 30 years.   

As I said, every situation is unique and I would be happy to discuss your situation with you and help you find a home to call your own. 

Carol Murphy

Keller Williams Greater Cleveland ~ Carol Murphy Team

Homes for sale in Avon Lake



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