Check this: Renters Pay the Landlord’s Mortgage
Renters or homeowners? When pressed, there are people who might say that they have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. However, everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage—either your mortgage or your landlord’s mortgage.
According to representatives at Harvard University,
“Households must consume housing whether they own or rent. Not even accounting for the more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.
Representatives from Freddie Mac explain another benefit of securing a mortgage vs. paying rent:
“With a 30-year fixed rate mortgage, you’ll have the certainty and stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”
As an owner, your mortgage payment is a form of savings, which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.
Check out the graph below to see the widening gap in net worth between homeowners and renters:
The bottom line is this: Whether you are looking for a primary residence for the first time or are considering a vacation home on the coast, owning might make more sense than renting—especially since home values and interest rates are projected to climb.
Looking to buy your first home soon and be a homeowner? Please contact the agents at Broadpoint Properties.