Many young professionals just starting out in the working world are often very hesitant to take out a mortgage in order to purchase a house, preferring instead to rent their living space. Too few young individuals and couples know or recognize the tangible financial benefits that come with home ownership even when there is a mortgage attached to their property. When it comes to mortgages and the numerous financial benefits of mortgaging versus renting a home, all it usually takes is a little education and information to help even the most financially inexperienced individuals understand why mortgaging is always the smarter decision. Let’s take a look at the reasons why:
Homes Accrue Actual Financial Value for Their Owners
There is no getting around the fact that a mortgage is incurring a financial obligation, and borrowers are agreeing to repay a significant sum of money over time. However, the financial “burden” of a mortgage is often viewed by other lenders and financial institutions as a financial asset rather than a mark against you. Why? Put very simply, homes generate financial value as you repay your mortgage principal and owe less and less each month. Better still, over time your property value increases while your payment stays the same. The end results? In many cases, you end up owning a house that is worth more than you paid for it even after interest.
Mortgages Make Owning a Home and Real Property Affordable
Unless you come from a family background or have financial resources where several hundred thousand dollars is “a small loan”, most people looking for a living space can’t pay cash for a house. Mortgages offer everyone the ability to own a home and their own land with manageable payments made a month at a time. There is nothing that compares to that very concrete experience of knowing that the ground you are standing on belongs to you, even if you are still making payments.
In the Long Term, Mortgages are Cheaper Than Renting Your Living Space
Too many people mistake the fact that their monthly rent payments are less expensive than mortgage payments. Nothing could be further from the truth. Every mortgage payment you make, every check you send to your lender, every dollar you pay off on your principal is another dollar in your own pocket down the road. Rent is money paid every month to someone else, and you don’t get the benefit of ownership when your lease is paid each year. With a mortgage though, every year of payments is another year closer to owning your own place that has real cash value. No rental property can offer you that.
Mortgages Provide Tangible Proof of Financial Success and Security
Few financial obligations are as rewarding as a mortgage. It seems strange to call a financial obligation rewarding, but this is one of the chief benefits of paying a mortgage that can’t be added up on a balance sheet or bank statement every month. Making mortgage payments reduces your overall stress and financial worries because you know that one day in the future you are going to see that money again.
Even better, every mortgage payment you make builds equity in your home, giving you financial breathing room in the event of a financial emergency and allowing you to put away money for the future at the same time. In terms of financial success and security, it is hard to do much better than paying off a home over time. When you pay rent and not a mortgage, that is money you will not see again ever. Whether you acknowledge that to yourself or not, it can still weigh heavy on your mind and your bank account.
Putting it all Together
All in all, getting a mortgage and owning a home is a far superior option financially than renting your living space. Your home is accruing actual value, and you can actually afford to own the place you live instead of paying someone else to live there. Moreover, paying on a mortgage benefits you more in the long term thanks to equity and rising property values. Best of all, paying a mortgage every month is tangible proof to yourself and to financial institutions that you are successfully making progress with your personal and professional life as well as your finances. You have greater financial security thanks to the equity in your home that you will generate over time, and you will be able to put more money into savings once your home is paid off completely.
If you are considering buying your first home but you are uncertain about taking out a mortgage and owning a home, you need to contact the Tim Bullock Team at Union Home Mortgages. Their friendly and knowledgeable staff can help you realize your dreams of financial security and home ownership. Call or visit their website today for more information on owning your own home instead of paying out money you will never see again someone else.