Paying rent every month may have you wondering if you’d be better off paying for a mortgage instead. But is making the switch a good idea? The answer may very well be yes, but that depends on what your priorities are. Here are some of the benefits of making the switch.
1 – Real estate is an investment
One of the most compelling arguments in favor of mortgages is that they double as investments. The money you spent on rent is money you’ll never see again, but what you pay towards a mortgage you may be able to recoup with a profit when you sell your property down the line.
Mortgages also have the advantage of having a fixed ending. And once you fully own your residence, your monthly living expenses will go down drastically.
2 – Owning a house gives you full control
Renting a home that someone else owns means you’ll be under all sorts of restrictions. These can make changing or improving the house more difficult, and it makes it harder to justify spending money on certain improvements unless the homeowner is willing to help pay for said improvements.
These are not problems when you own the house. Even if you are still paying for it, you have the freedom to renovate and improve your house at will. You won’t need anyone’s approval to get things done, and if you intend to fully pay your mortgage, that makes it easier to invest in improvements that may take decades before they pay for themselves.
3 – There may be incentives
Many regions of the world have incentives to make getting mortgages easier and more affordable than renting houses. Keep an eye out for government subsidies and tax breaks you may be able to get by becoming a homeowner — that alone may make owning a house a better deal than renting it.
Your credit score also plays a big role in determining whether mortgage rates will make sense for you financially. If you have a bad credit score, try working with a bad credit mortgage broker like 1st UK mortgages to secure the best deal possible for your situation.
4 – Owners can get revenue
You can turn a house or apartment you own into a source of income by renting it. This could mean renting the entire property or renting certain areas like a spare bedroom or the house’s basement. Rent revenue can help you pay part of your mortgage, or even cover it entirely.
5 – Price stability
Once you get a mortgage loan the deal is completed; what’s on paper is what you’ll have to pay. You are still free to renegotiate the deal later, but it’s not up for yearly renewal like many lease contracts. And you won’t be forced to take a new mortgage deal from the bank down the line just to keep living in that house.
That’s a level of stability you just can’t get from renting. If the average market rental price in your region goes up, chances are that your landlord will want to raise your rent the next time your contract is up. Or they may even ask you to vacate the apartment so they can sell it. This makes mortgages the clear best option if you want to set down roots in a home or a given neighborhood.