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The Hood Magazine

Renting vs. Buying: A Senior Mortgage Banker's Perspective

Jul 31, 2023 ● By The Hood Magazine

Sponsored By:DVN Mortgage 

Do you know the difference between renting vs. buying a home? As a Senior Mortgage Banker with Plains Commerce bank who has extensive experience in the housing market, I've seen many individuals faced with the rent vs. buy dilemma. This decision depends on factors like financial stability, personal goals, and lifestyle preferences. In this article, we'll explore the pros and cons of renting and buying to help you make an informed choice.

Financial Considerations:

Building Equity: Homeownership allows you to build equity over time, while renting doesn't offer long-term financial benefits.

Initial Costs: Renting generally requires an upfront investment including an application fee and a deposit, while buying involves a down payment, closing costs, and potential add on expenses like a home inspection. However, I have access to some amazing down payment assistance programs that will keep homebuyers’ out-of-pocket expense very minimal.

Long-Term Cost Comparison: Monthly mortgage payments could be higher initially, but they provide stability, potential fixed payments and each payment reduces the balance owed on the home. Statistically, majority of the funds a homeowner pays throughout their time making mortgage payments will come back to them when they sell the home. Rent will increase over time and the funds renters pay each month will go to their landlord and they may potentially get their initial deposit back when it comes time to move out.

Flexibility vs. Stability:

Renting offers flexibility for easy relocation, while homeownership provides stability and the ability to establish roots in a community.

Tax Implications and Financial Benefits:

Homeowners can benefit from tax deductions on mortgage interest and property taxes, while renters don't have access to these deductions.

Homeownership can generate rental income, offering additional financial benefits.

Lifestyle Considerations:

Homeowners are responsible for maintenance, while renters can rely on landlords for upkeep. If renters have a pet, they are generally required to pay an additional amount monthly as well as an extra “pet deposit” up front. If a renter lives in an apartment building, shared laundry facilities for the building is common, where homeowners can have their own. Owning a home allows personalization and control, while renters may have restrictions on modifications.

The choice to rent or buy a home is personal and depends on individual circumstances. Consider your financial situation, long-term goals, and lifestyle preferences. Homeownership offers financial benefits and stability, while renting provides flexibility and lower upfront costs in some cases. By evaluating these factors and seeking professional advice, you can make an informed decision that suits your needs.

Buying a home can be a life-changing experience. I would love to talk about your options and help you through the process on finding out what is best for YOU.

Give me a call and we’ll get started today - (605) 261-6721.

Dawn Van Nieuwenhuyzen, Senior Mortgage Banker at Plains Commerce Bank – NMLS #21096

All Loans subject to credit approval. This is intended for informational purposes only.

Member FDIC. Equal Housing Lender.