Not according to a recent study, the results of which were posted at MarketWatch.com. It finds that it’s cheaper to rent in only eight states and Minnesota isn’t among them. Buying a home may seem like a huge expense because of the initial outlay, but owning a home brings with it certain financial benefits.
The most significant of these have to do with taxes. A Congressional Research Service study finds that, on average, American homeowners saved about $1,900 a year on their taxes. Some of the deductions afforded homeowners include mortgage interest, property taxes and others. These are deductions you can’t take if you rent a home and the savings help offset the annual cost of the home, something many first-time buyers don’t take into account when determining whether or not they can afford a certain house payment.
Consider as well that, depending on your down payment, mortgage rate and the price of the home, you could just end up paying less per month on your own home than you do for your landlord’s.
Owning a home also offers the opportunity to build equity. Homeownership, in fact, is often referred to as a “forced” savings account, because it’s a tangible asset that you can sell (hopefully for a nice profit!). Obtain a 15-year loan to speed up the accumulation of equity.
Finally, consider this: regardless of how long you live in your home, unless you have a variable rate mortgage, your payment will remain steady. If you continue to pay rent, it’s almost a given the landlord will raise it at some point during your tenancy.
If you’re still not convinced that sometimes buying a home is cheaper than renting, consult your tax specialist or accountant. He or she can crunch the numbers for you, using current housing market statistics.
If you’re still in doubt, attend one of our home buying seminars or contact us to find out what mortgages you might qualify for. We would be happy to assist you with the home buying process and what down payment assistance may be available to you!