Many renters wonder if they should buy a house instead of paying rent every month.
In a recent report from Bank of America, the life satisfaction that homeowners have versus renting is profound.
Ninety-three percent of homeowners are happier with their home than they were renting. Eighty-three percent say that they could never go back to renting.
Of course, the vast majority of renters want to own a home soon, but many don't get started because of misconceptions and misinformation:
- I need a 20% downpayment - The truth is that the average down payment is around 8%. There are many programs that will let you put down as little as 3%. Veterans and others can find zero down payment mortgages.
- A house is always more expensive - The reality is that many renters are already exceeding the recommended 28 percent of their income on housing. If you can keep your housing costs near that 28% mark, you should be fine. In many parts of the country, that's an achievable number with a bit of hunting and compromise.
- I need perfect credit - No, you don't. If your credit is poor, you can work on fixing it before you go for a mortgage, but there are "bad" credit mortgages. A home is a different type of investment so banks are willing to take a chance on poor credit.
- There will be a lot of work - Lots of renters love to be able to make a phone call and get something fixed. Owning a home doesn't have to be filled with constant repairs. A good home inspection, some insurance, and a bit of planning will keep everything in good shape.
Buying a home is an investment in your future. It's an investment that many of us can make without a problem.
Consider paying your own mortgage instead of someone else's. You can be building your own net worth instead of your landlord's business.