As rents consistently rise across the country, many Americans still continue to rent their homes. While you may have a great reason as to why you’re still renting, there are plenty more reasons why you should take the leap toward homeownership. Whether you’re waiting to build your credit or save for the initial down payment, you should take full advantage of historically low-interest rates.
Here are 5 reasons why you should stop renting and start buying today:
Homeownership is less expensive than renting
One excuse that is often used for not buying a home is “I can’t afford a home.” In a recent study, it was found that it is actually cheaper to buy a home than rent in 39 of the 50 states, including California.
Rates are near historic lows
These last couple of years we’ve been spoiled with record low-interest rates. With rates hovering around three or four percent, we may not see these rates much longer. We also may not see rates reaching the teens anytime soon, but many industry experts predict rates will move into the fives sometime this year. Buying a home while rates are low is the smartest move. The difference of one percent can make a major impact on your total payments over time.
Loans are easier to qualify
Don’t have an impeccable credit score? Don’t fret. Lenders are scaling back on their requirements. Today, the FHA requirements are quite a bit lower than conventional loans, you may already be qualified.
The days of the 20 percent down are gone
Back when your parents bought a home they probably put down 20 percent. Today, you can make down payments as low as three percent. You’ll have to obtain Private Mortgage Insurance, but once you’ve reached a point in your payments, you stop paying for it.
Rents keep rising
Unfortunately, there is no rent control in Orange County, so that means no matter where you live, your rent is subject to increase. Last year, rents rose nearly 8 percent year-over-year. When you buy a home, your payments don’t change unless you take out a home equity loan or refinance. In the end, you’re paying off your mortgage versus paying someone else’s.