Why Are You Renting?

The reality of owning a home is that it is both easy and beneficial. If you plan on living in a home for more than 2 or 3 years, then, financially, it makes more sense for you to purchase a home vs. renting, in general. (We acknowledge that there can be other variables. Talk to your local Realtor to discuss your specific situation, or if you are in the Colorado Springs area, give me a shout).

To start, here is a super fun tool that allows you to play with numbers to see how renting vs. buying impacts your pocketbook in the long run. I recommend starting with what you are currently paying in rent, or what your typical monthly budget is for housing. Enter that info in the “rent” field, and then play with the purchase price of a house. This will show you how long you have to live in your house before reaping the financial rewards of owning a home. I propose looking at what the purchase price of a home should be if you were to live there 3-5 years. This will help you start with an initial budget idea.

Rent Vs. Buying Calculator

On average, once you have been in a home for 3-5 years, you start to quickly realize the financial gain in homeownership, depending on the purchase price of the home. Some additional benefits of homeownership can be:

A photo by Drew Coffman. unsplash.com/photos/DzIt-fTYv4E

  • You have control over the style/design of your home so that it reflects your taste and personality.
  • Fido, Fifi, and Tigger – or any other pet you have – can stay with you! Pets allowed in your own home. No pet deposits.
  • No deposits of any kind. Don’t have to worry about coming up with 3 months of rent or wondering if your landlord will find ways to keep your deposit when you move out.
  • Never have to worry if proper maintenance is being done. As a homeowner, you have full control of the condition of your home and can make sure that your home stays in tip-top shape. No waiting for approved maintenance men to show up when they feel like it and at inconvenient times, or not at all.
  • Avoid unplanned rent or utility expense increases. If you have ever rented, you know that at you can receive a notice that additional fees will show up on your next rent/utility bill at any moment. A yearly lease can quickly jump up so much that you have to scramble to locate a new home before the lease expires. Or, in an apartment complex, your monthly bill arrives with sudden “additional” fees that you have no control over.
  • No worries that your rental home will be sold out from under you. This is a very real possibility. It is disheartening to finally become established in a neighborhood and feel at home, only to find out the owner has decided to sell and you have 45 days to pack up your family and find another home.
  • With smart buying and planning, you are creating an asset that can help you achieve long-term financial goals.
  • Develop an additional stream of income by renting. Once you have lived in your home for a few years, instead of selling it and purchasing another home, or living on the road, consider adding your home as part of a bigger retirement plan. Your home can be used for rental income, whether it is short-term or long-term. Using your home for passive income can be an exciting prospect that I would love to explore further with you.

Top Four Excuses Debunked

Now that you see how, in the long run, your pocket book will love you for purchasing a home over renting let’s look at the top 4 excuses why most people think they can not become a homeowner.

1. No Money For A Down Payment

So you don’t believe that you have enough money for a down payment? Can you come up with at least $1000? Then you are in luck! In Colorado, there are several Down Payment Assistance programs available for individuals and families who do not have the extra cash to lay down for the purchase of a home. As long as you have a $1000 in the bank, have a two-year work history, are a first-time buyer OR have not owned a home in the last three years, then you most likely qualify for Down Payment Assistance. There are several programs available for low to middle-income families who want to become homeowners.

Read my blog post, Down Payment Assistance, for more information.

2. I Have Bad Credit

Look. We all have had stumbles and hiccups in one way or the other. If yours happened to impact your credit score negatively, don’t worry. A caring and knowledgeable loan originator can assist you with repairing your credit – or point you to someone who can. All it takes is 2-6 months to bring your credit score to at least 640; this will enable you to qualify for a mortgage. With a little patience and planning, in no time you will be ready to start the home buying process.

3. I’m Locked Into A Lease

Are you eager to purchase a home but still have several months left on your lease? Here is a solution: Your loan originator or realtor will be able to pick a closing date that enables you to have two months in your new home without a mortgage payment. Use that money saved to pay off your lease.  Also, consider the time it takes to close on a house. With a well-planned closing date coupled with the normal closing process, it is possible you could have 2-4 months from the time you submit an offer to when you have to make your first mortgage payment. Your monthly mortgage payment is likely to be less than your rent, plus you can have 2 months in the new house without a payment at all. Instead of sitting around, pay off your lease with the money you save and move in to your own home.

4. I Haven’t Been At My Job Very Long / I’m Self-Employed

The key here is two years. As long as you have been at the same TYPE of job for two years, then you can apply for a mortgage. You do NOT need to be at the same location or company, but need to have been in the same field of work for a minimum of two years.

If you are self-employed, you need a minimum of 2 years worth of tax returns showing sufficient income. Depending on your situation, it may require not taking all the deductions available to you as a business owner so that you can show appropriate income. Talk with a lender to determine what income you need to show for the type of home you want to purchase.

little-girl-couch

If you think that you could never buy a home, I hope this shows you how easy it is to become a homeowner and also helped you see the many wonderful benefits of home ownership, including providing a stable place to raise a family, or whatever dreams you have! With a little planning and preparation, you could be ready to purchase a home within 2 months to two years!

Need help making a good plan? I’d love to sit down with you and develop a strategy that leads from renter to homeowner, all the while easing up on your pocket book. Let me help you Live Your Dream.

 

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