Today’s real estate market provides an excellent opportunity for renters to turn their monthly payments into equity. While rising slightly, interest rates now are still much lower than in the past ten to twenty years, and home prices in many areas are adjusting back down to reflect reasonable levels of appreciation.
It’s critical to begin taking those first steps towards home ownership, and here are some reasons why.
Money paid for rent goes into the pocket of the landlord, while money paid for a mortgage goes toward equity in the home. In other words, you keep the money you pay for your home, as its investment value increases with every payment.
Over the last decade, the cost of rent has increased an average of 3% each year. At that rate, payments of $1,000 per month would total $137,567 over ten years, with no accumulation of equity or wealth.
If you could put $10,000 down on a $210,000 home today and pay $1,100 per month, your equity would total $138,521 over that same ten-year period. That’s your money! This calculation assumes a 30-year fixed rate loan at 6.5% and an annual appreciation of 4.5%.
So sit down and do the math, and then contact a local real estate agent to discuss your best options for home ownership. It’s never too late to start building your future!
