Across the U.S., there are millions of renters who yearn to be homeowners or who are at least wondering if they would be better off owning their own home. For many, the decision often boils down to the current state of the housing market and whether home prices and interest rates are going up or down.
For some renters, however, buying a home is almost always the better option, regardless of current market conditions. Below are just a few reasons why – and how you can help them fulfill their dreams.
Ownership Has Potential Financial Advantages
From a return-on-investment standpoint, homeownership is almost always a superior option over renting. Many renters are motivated by the realization that, over time, the money they pay for rent could be used to build home equity. They understand that the value of a home typically increases over the long term, so even if their rent was less than their mortgage payment, they will eventually come out ahead.
By getting a fixed-rate mortgage, renters can stop worrying about their rent going up, too. Plus, they may be able to deduct their property taxes, mortgage insurance and the interest portion of their mortgage payment from their taxes. In addition, they should consult a tax professional.
Of course, owning a home comes with additional monthly expenses that renters don’t usually have to pay, including repairs and landscaping. At the same time, homeownership provides financial options that are inaccessible to renters. If they build equity in their home over time, homeowners may have the option to take out a second mortgage or a home equity line of credit, which they can use for home improvements or to pay for a child’s education.
Homeownership Feels Good Too
In addition to financial advantages, there are many intangible and potential emotional benefits of homeownership. In fact, how homeownership makes people feel is arguably the single biggest driving factor behind renters who choose to become homeowners.
For example, homeownership gives people a greater sense of freedom. They can invite people to stay with them, adopt a dog, or even start a backyard farm without ever having to get anyone’s permission. Plus, if they don’t like something about their home—perhaps the kitchen is outdated or it’s not very energy efficient—they can simply change it at any time.
Homeownership also provides people with a sense of security and stability that strengthens the ties they have with each other and their community. There’s even research indicating that homeownership leads to better emotional well-being and even better grades among children whose parents own their own home.
Even when the housing market winds turn volatile, these financial and emotional factors will always make homeownership attractive to certain renters. As many FHA lenders know, however, there’s often one big obstacle holding them back – the down payment.
Fortunately, there are down payment assistance programs available for credit-worthy renters, such as CBC Mortgage Agency’s down payment assistance program, Chenoa Fund. Over the years, the Chenoa Fund has been combined with FHA-backed mortgages and conforming loans to help thousands of first-time homebuyers overcome the hurdles to buying a home.
Most of these buyers were from underserved communities, including people of color who did not have help from their families to help out with a down payment. CBC Mortgage Agency also provides homeownership counseling, free of charge, to every borrower to help them make a successful transition to homeownership.
If you’re like most correspondent lenders and brokers, chances are you have many credit-worthy renters in your contact database who dream about owning a home but aren’t sure whether they will ever get the chance. Visit our website to find out how to partner with CBC Mortgage Agency to help potential homebuyers achieve their dreams.
CBC Mortgage Agency – NMLS 1186381
For licensing information, go to www.nmlsconsumeraccess.org.
Illinois Residential Mortgage License #MB.6761292. Illinois Department of Financial and Professional Regulation, Division of Banking, 100 West Randolph, 9th Floor, Chicago, IL 60601 – 1-888-473-4858. This information is provided by CBC Mortgage Agency and intended for real estate and mortgage professionals only. It is not intended for public use or distribution. Terms and conditions of programs and guidelines are subject to change at any time without notice. This is not a commitment to lend. Equal housing opportunity.
