Thinking of buying your first home, and are ready to start saving for that initial down payment?
It’s understandable that you’d want to own a home. There’s just something prideful about saying, “this is my home.” There are also other reasons such as bad landlords who don’t fix anything, knowing that you could be paying your mortgage off instead of putting money in your landlord’s pockets each month, building equity, or/and you are thinking about starting a family and raising them in a home that is yours.
Whatever the reason might be, I think ‘owning’ over ‘renting’ is a much better idea–and I’ll explain why.
My favorite reason is that each time you pay your mortgage, you become richer. Every month that you pay your mortgage balance down, after interest and after all other fees, you own a larger percentage of the home you live in, which makes you richer. For example, if you buy a home for $100,000 and pay into it for 10 years: let’s say you pay $600 per month for 10 years, you’ve approximately paid off about $72,000 over that time. And over that time you’ve increased your net worth by approximately $72,000. The $72,000 is part of your overall net worth because you own that portion. If you sold your home, that’s how much you’d profit. If you rented that whole time, then you’d still be worth the same, and not any richer.