When you make your payment to your landlord every month like the dutiful renter you are, you are placing cash in his pocket.  Maybe it's time to consider keeping some of that money for your self.....

No doubt about it.  Renting definitely serves a need and a purpose.  It also is typically hassle-free. There's very little maintenance.  If something goes wrong, you call someone, and they fix it.   But is it always necessary or the smart choice?

Think about it.  Every month when you write that check out to Joe Landlord, you are paying your landlord's mortgage for him (or at least some portion of it).  And, in the meantime, you are building equity for him in the property he owns.  That's really quite nice of you. Very thoughtful indeed.  So, if he decides to sell that property in the future, do you think he will write you a thank you note for all the money you've made for him?  That might happen when pigs fly.

Say you pay $1000 a month for rent.  Most landlords cover their mortgage when they set the rent payment.  Typically, but not always.  So if you stay in this place for two years, you will end up making $24,000 worth of mortgage payments for your landlord.  That's mighty nice of you.  Now, in turn, think of the property's appreciation that will occur simultaneously. For instance, when you first started renting the house, it was worth $100,000.  Now, two years later, it's worth $124,000.  Since you've been so considerate to make his mortgage, oops, I mean your rent payment on time, your landlord is smiling.  He's just accumulated $24,000 in equity.  And it's all thanks to you!

Hmm, that gives you pause for a moment, doesn't it?

I'm not trying to make you feel bad.  Like I said before, renting definitely serves a need and a purpose.  Some people can't qualify for a mortgage.  Perhaps they are self employed, and need to build up some type of income history of earnings to get a home.  Or maybe their job is transient or unstable, and they don't want to have to deal with selling a home in a few months.  There are many instances when renting makes sense.

However, if you are just being complacent or nervous, then you might reconsider renting.  Yes, I said nervous.  You see, fear keeps many people from homeownership.  The paperwork and numbers can be daunting, even to a person who is buying their fifth house.  And if you are a first time homebuyer considering a thirty year debt, it can be overwhelming and cause great anxiety.

But I'll let you in on a little secret.  Homeownership is easily attainable.  You just have to set a little cash aside and pay your bills on time.  That's it.  No great mystery.  And here's another little tidbit.  It's a buyer's market right now.  That means there are deals to be found and lots of inventory available. 

So if you're a renter, consider paying yourself instead of a landlord.  Contact a trusted mortgage lender.  There are tons of options that can be explored if you just know where to look.  Let your mortgage lender help you figure out how long it will be before you can move out!

Let My Experience Work For You!

Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910.  For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.

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