So, you’ve been wondering if a home mortgage is really better than paying rent. In the current financial market, it makes sense to wonder what will get you the most bang for your buck. Buying a home is a big investment that requires a lot of paperwork while renting out a home can be a much less complicated process. So what’s the best option for you? Today we’re going to look at the pros and cons of paying a mortgage and paying rent so you can have a better idea of what works best for you.
Pros and Cons of Paying Rent
Renting out a house or apartment is a common way to go. Many Americans choose to rent their homes, and it’s clear to see why. When renting you aren’t taking out a massive amount of debt, you don’t have to pay property taxes, and any maintenance doesn’t come out of your pocket. Rental homes are easily available all over the place and you could realistically find a rental in any part of town you could want to live in.
Unfortunately, paying rent tends to be more expensive than having a mortgage, and you aren’t paying towards owning anything so your living expenses are only helping you have a place to live from month to month or year to year depending on how long you pay your rent for at a time. This isn’t to mention the fact that most places can raise your rent every month if they want to. When paying rent you can also get evicted from your home and depending on what state you live in you could be evicted for any number of reasons.
Pros and Cons of Having a Mortage
Having a mortgage is typically cheaper per month than paying rent, and the money you pay is going towards owning the property. It’s a lot harder to get kicked out of a home you’re paying a mortgage on than it is to get kicked out of a rental unit, and the only person you might have to answer to for anything is the mortgage company you’re working with. Homes are also a great investment if you buy at the right time, it’s possible to buy a home for cheap and sell it when the housing market is significantly higher and you can stand to make a whole lot of money especially if you do some renovations while you live there.
When you’re paying a mortgage you’re financially responsible for any maintenance. That means plumbers, HVAC technicians, electricians, pest control, garbage pick up, really anything in your home that needs maintenance. You also have to pay property taxes every year which can be kind of expensive especially if you weren’t prepared for it. There are also other fees that you have to be prepared for, like homeowners insurance. Not to mention the fact that you have to take on a massive amount of debt that can take you decades to pay off.
So Which is Better?
Both paying rent and having a mortgage have their pluses and minuses, but generally, it’s considered a better idea to have a mortgage. When you have a mortgage you’re paying towards owning the property and that means that one day you won’t have to pay anything to live in your home. You can live in the same apartment for 40 years and still have to pay rent and will have nothing to show for your loyal payments except for a significant increase in how much you pay for rent in comparison to how much you started out paying. If you have good enough credit and enough money for a down payment it’s generally a much better idea to get a mortgage.