Ã‚Â There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlordÃ¢â‚¬â„¢s. As aÃ‚Â paperÃ‚Â from theÃ‚Â Joint Center for Housing StudiesÃ‚Â atÃ‚Â Harvard UniversityÃ‚Â explains:
Ã¢â‚¬Å“Households must consume housing whether they own or rent. Not even accounting for 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. ThatÃ¢â‚¬â„¢s yet another reason owning often doesÃ¢â‚¬â€as Americans intuitÃ¢â‚¬â€end up making more financial sense than renting.Ã¢â‚¬Â
Also, if you purchase with a 30-year fixed rate mortgage, your Ã¢â‚¬Ëœhousing expenseÃ¢â‚¬â„¢ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.
And, as an owner, the mortgage payment is a Ã¢â‚¬Ëœforced savingsÃ¢â‚¬â„¢ which will allow you to have equity in your home you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity.
Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are still at bargain prices.Ã‚Â Ã‚Â Either way, youÃ¢â‚¬â„¢re still paying a mortgage