Many people in this country rent homes and apartments not realizing how much money they are just throwing away. All the renters are doing when they rent is pay the landlords mortgage for them so after the loan is paid off in 30 years, they make 100% profit and the renter is left with nothing but their personal belongings. By all means, purchase a home and stop renting.
Stop Throwing Your Money Away
Almost every week I tell people to buy their first home and build some equity in it for a few years so they can sell it and buy a more desirable home. After renting an apartment or home for a year, what do you have to show at the end of that year when you move out of that rental ...view middle of the document...
You are correct in saying that renting is cheaper than paying a mortgage but a few years down the road, you will more than likely have a nice amount of equity in your home and at that time you can turn around and sell the house and use the money you have in equity to make a down payment on a more desirable home. When you rent, you do not have the ability to think ahead at the day that the payments will stop but when you purchase a home, you know that in 30 years, the payments stop and you will own your home.
Virtually everyone who buys their first home has to stretch their budget. A home purchase not only creates a place to live but a forced savings account. I recall lying awake the first night in my current home, about 2 years ago, worrying about how I would make the mortgage payments. Somehow I made every payment, and today have built a substantial equity mostly due to the homeâ€™s appreciation in market value due to inflation. I crunched some numbers on how much a person wastes in 3, 5, and 10 years in rent and here are the results:
| |In 3 years |In 5 years |In 10 years |
|500/month |$18,000 |$30,000 |$60,000 |