Renting can be good and bad. While maintenance and lawn care are taken care of for you, the ability to customize your home and sometimes even have pets, are restricted. More than that, renters often have misconceptions about the actual cost of owning vs. renting. We have compiled some statistics to further explain the benefits of home buying and to help you make an informed decision.
While having a 20% down payment will eliminate PMI payments, it is not mandatory for first time home buyers to have. Some companies have programs that require no down payment at all! And while a credit score of 780 will likely get you the best interest rates, a credit score in the low to mid 600's is enough for most companies to approve you for a mortgage.
Many renters have the perception that renting is cheaper than buying, as you don't have to pay for repairs or mechanical breakdowns. While it is true that those expenses can be sporadic and unplanned for, on a monthly basis it is cheaper to own a home. The average renting price in 2018 was $1,816. When comparing the same monthly payment for owning a home, you could own a $320,354 home. In a study by Zillow, the percentage amount of income needed to own a home vs. rent is lower for buying a home. Where as the average individual buying a home only spends 17.5% of their income on their mortgage, the average renter pays 28.4% of their income, an increase of 10.9%.
While there are an innumerable amount of reasons that you may dislike renting, these are some of the leading reasons renters list for disliking renting. Whether you find your reason on this list or if it something different, there is no better time than the present to start the home buying process.