Whether you’re a renter or home owner, you’re paying a mortgage. The difference is, renters pay the mortgage for somebody else – the landlord – who benefits from the equity earned from the home. While home owners are forced to save by building equity in a home through monthly payments, renters basically throw their monthly payment away. They’ll never see or benefit from that money again.
Putting off buying a home makes no sense. Prices are predicted to increase at 4.7% in the next year according to HomeLogic’s latest Home Price Index. The same report indicates that prices have appreciated 7.2% during the previous 12 months. That means if you wait to purchase a home, you’ll pay more to get less, which makes about as much sense as throwing your monthly dwelling payment away.
Mortgage interest rates are also projected to increase. According to Freddie Mac’s Primary Mortgage Market Survey, interest rates have hovered around 4% for a 30-year mortgage. Fannie Mae, Freddie Mac, and the National Association of Realtors, as well as The Mortgage Bankers Association, project that rates will increase by this time next year.
The ‘cost’ of a home is comprised of two major components: the price of the home and the current mortgage rate, and both are on the rise. Buying sooner rather than later can amount to substantial savings. It’s time to make your move!