Cornerstone Blog

Set Your Financial Journey

Buying Vs. Renting

  • February 05,2024
  • Guest Author, Chuck Eads, Chief Lending Officer
  • 4 minute read
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Standing at a Crossroads – Facing the Reality of Home Buying Anxiety

For many first-time home buyers, the decision between renting and buying can feel like standing at a crossroads. And the economy and home buying environment seem like they’re constantly changing and becoming more and more complicated. With home costs rising (along with everything else) it might make a new buyer with limited experience very uneasy and unsure about the options available. And it can certainly sometimes seem easier to just keep renting – especially with uncertainties and unknowns causing undue anxiety.

Home prices go through cycles, apart from the “great housing crisis” in the mid 2000’s, home prices have done nothing but climb. By waiting, you risk having to pay more later. And you’re still going to end up with a higher housing payment, it’s just a matter of whether you’re paying it into your own investment (home) or a landlord’s.

Don’t get me wrong, homeownership isn’t for everyone. If you have a job that makes you move often, or you aren’t planning on staying somewhere for five years or more, you may want to examine other housing options. And there are additional costs associated with owning a home. Things will inevitably break, need to be repaired and/or updated, and there’s regular maintenance like cleaning gutters and mowing the lawn that you’ll need to be prepared for. If you aren’t handy, you’ll need to be willing and able to hire the right people to do the job.

Renting vs. Building Equity

Renting offers flexibility and freedom from the responsibilities of homeownership. There’s no need to worry about maintenance costs or property taxes. However, your cost of renting will probably include those costs for the landlord’s trouble and renting doesn’t build equity – which could be very useful for you in a later stage of life. (We’re always thinking of future you!)

Low down payments and special borrowing programs can allow you to take advantage of home ownership now, which can be a significant financial benefit in the long run.

Low Down Payments and Homeownership

Many first-time buyers are concerned about the hefty down payment traditionally associated with purchasing a home. The good news is, there are various loan programs available that allow for lower down payments, sometimes as low as 3% or even 0%1 for certain qualifying individuals. While a low down payment might mean higher monthly payments or additional mortgage insurance, it can be a stepping stone towards homeownership without a substantial upfront cost. A low or no down payment doesn’t mean you don’t have to bring your wallet to the closing table though. There are still costs associated with getting those keys in your hands. Your Mortgage Lender can help guide and prepare you for those up-front costs.

Consulting with Professionals

Navigating the realm of real estate, especially in a changing economic environment, can be daunting. Seeking guidance from real estate professionals, financial advisors, and mortgage experts is invaluable. We can help assess your unique situation, offer insights into market trends, and guide you toward making an informed decision.

Abound has a team of experienced Mortgage professionals that want to help you realize your homeownership dreams. We can offer unique solutions to fit most any need and in 2024, there are some unique perks to help make your dream of homeownership a reality, like our Rate Hawk, Rate Watch Guarantee – get the bet rate without worrying about when to lock in without extra work on your part2. Plus, get $1,000 from Abound to use towards closing costs3 and we offer a 24-month Rate Drop Guarantee4 on many of our Home Loan options that take some of the worry out of buying a home today. Talk to us today to see how we can work together to make homeownership possible.

Ultimately, whether you choose to buy or rent, what matters most is making a decision that aligns with your lifestyle, financial capability, and long-term aspirations.

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1Not all loan applicants will qualify for 100% financing. 100% financing is not available on all loan types. Speak to an Abound Mortgage Lender for details.

2Rates may change daily. Applicant(s) who apply between February 1, 2024 and September 30, 2024 will receive the lowest rate qualified for based on credit application between pre-qualification and issuance of loan Closing Disclosure - typically three (3) days prior to closing.

3Abound will apply $1,000 in credit towards closing costs at the time of closing. Abound’s $1,000 closing cost gift to applicants may be discontinued at any time and without notice. Refinances of current Abound Home Loan products are not eligible for this promotion.

4If, over the course of the 24 months following original loan closing date, rates drop from the original mortgage loan rate, the loan holder may request a one-time rate adjustment within the same credit tier for which the loan holder previously qualified. The loan must remain as the same type and term as the original loan. Adjustable Rate Mortgages(ARMs) and Veteran’s Administration (VA) loans are not eligible for a reduction in rate through the rate drop program.