Our summer intern, Teree Willis, is a smart saver, and she intends to buy her own home one day.
Who doesn't want to save money? Saving money means greater security and freedom. One of the biggest financial decisions a family can make is whether to rent a home or buy it. When it comes to building savings, owning is usually the best option for families who can afford it. Here’s why:
According to the real estate website Zillow.com, the median rent nationwide is $1,575 per month. However, if you were to own a $200,000 home with an interest rate of 4%, your payment would be around $950, plus taxes and insurance. So even though owning a home comes with added expenses such as maintenance and repairs, the cost may be more affordable than you realized.
Owning a home also gives you an advantage in the long run. With every mortgage payment, you own a little bit more of your house free and clear. In most cases you’re building equity—the dollar value of what you own. More equity means that you’re actually building wealth. It’s like having automatic savings. (Plus you have your own place, and you can decorate it any way you want!)
One more advantage of owning is that you get a predictable payment. Rents can change, but with a fixed-rate mortgage the principal and interest stays the same for 30 years unless you decide to change it. Over time, you may even be able to refinance your mortgage with a lower interest rate. While your monthly rental rate is rising, your mortgage is building your savings more and more and MORE.
Maybe you need to rent a place or live with family or a roommate for now—it can take time to save a down payment to buy a house. You’ll also need good credit. Owning a home isn’t right for everyone, but many people can benefit. If you think you want to own but you’re not sure whether you can swing it, please call Member Services at Self-Help. We have lending staff who would love to talk to you about your situation and help you decide if you’re ready.