To Buy, Or Not To Buy: That Is The Question

Is now the right time to buy a home?

Happy woman with keys hugging man

Spring time is notorious for fun, flowers, and for sale signs. With mortgage rates currently at a historic low and changing from day to day, now is a great time to consider buying a home. But what about renting? Should you stay or should you buy? Sure, your maintenance is taken care of and you don't have a yard to mow; but are you throwing your money away?

One of the primary benefits of purchasing a home is that it is a financial investment that builds equity. Equity is the current market value of a home, minus what is owed. This number can increase over time if property values increase or you pay down your mortgage loan. Just remember that when you own, you are building your own equity. When you rent, you are building your landlord's equity and your money is working for someone else. On the other hand, if you don't plan on staying in your home longer than three years, renting might be a good option. The value of your home has not appreciated enough to offset the fees you accrued when you purchased the house.

And what about these tax breaks? Renting gives you almost no tax incentives unless you are able to deduct home office space or your property taxes are bundled into your lease agreement. As a homeowner, you are entitled to a plethora of tax breaks that include a mortgage interest deduction, mortgage interest credit, mortgage discount points, and sales and property taxes.

Another advantage to buying a home right now is stable housing costs and low interest rates. "With rates being at a historic low, now's the time to consider buying a home. Recent stock market issues due to the Coronavirus have caused rates to be lowered," says Igor Babamovski, Vice President of Residential Mortgage Lending at Telhio Credit Union. "The purchase market is in full swing due to a lighter winter and great rates. If you're planning to buy, there's no better time than now." By buying now, you can take advantage of the super low rates and secure a monthly payment that is consistent every month, no matter how the market changes over the years.

Renters don't normally have the luxury of a fixed monthly payment. Rent typically goes up every year, causing renters to have to adjust their budgets for rising costs or consider moving. According to Trulia, rent continues to outpace inflation. In 2017 alone, the median rent rose 3.1%, and since 2012, rent has increased 19.6% nationally.

Ultimately, the decision to rent or buy will depend on your financial situation and your own personal goals. If you are thinking of homeownership, we suggest doing your homework before you commit to a mortgage. Check out the variety of free financial education

resources available to help you decide if buying a home is the right choice.

If you're ready to make the move, Telhio Credit Union offers a variety of home loans that fit your needs, keeping you financially stable while you achieve your goal of owning a home.

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