In today’s market, service members have more reasons than ever to consider home ownership. From the low interest rates, flexible VA Loan guidelines, and rising rents, buying a home may be a better option. Let’s look at some reasons buying may better than renting for service members.
Cheaper to Buy Vs. Rent
When it comes down to buying vs. renting, the biggest factor for most is the monthly cost. Rent has long been considered a cheap alternative to homeownership, but that reputation is quickly changing. Buying a home is now cheaper than renting in most U.S. metropolitan areas. Additionally, house prices are continuing to lag as they stay on the market longer for many areas.
Equity
Perhaps one of the largest reasons buying is better than renting for service members is the equity you build over time. With a rent check, you pay your landlord, but at the end of the lease you walk away with $0 in investment. With a mortgage payment, what you pay monthly goes toward how much of your home you own and could be used for future refinances or buying a new home. If you’re paying the same amount or less a month for a mortgage, wouldn’t it be nice to build some equity at the same time?
Tax Advantages
Tax deductions give homeowners a reason to smile once tax time rolls around. Homeowners get unique tax breaks by staking property claims. Additionally, the interest payment on the monthly mortgage payment is deductible, as well as some moving costs. Tax rules vary by market, so always make sure to consult your real estate attorney before proceeding. Many counties across the U.S. allow 100% disable veterans to waive property taxes in full or for a significant amount.
Flexible VA Loan Guidelines
As a service member, you have access to all of the benefits of VA home loans. With VA home loans you have up to 100% financing available, no monthly private mortgage insurance, flexible credit score limits, and seller concessions up to 4% of the reasonable value of the property. These are all benefits that are not available to you when renting. And you can use your VA loan more than once. Then you can become the landlord.
Credit Opportunities
Opening a home loan adds a tremendous amount to the available and open credit category of your credit score. A lot of times banks favor those who own a home, which is why the questions “do you rent or own a home?” on loan applications. This is a good factor to keep in mind if you plan on investing in other properties down the line.
Opportunity to Personalize
Aside from the monetary benefits of owning a home, there is also a huge emotional reward from owning a home. When you buy a home, you are free from landlord restrictions and rental policies, and you can create any space you want. When you own a home, you can paint the walls any color you want, add living space outside, and update kitchen hardware without fearing the rules of renting.