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Rent vs Buy 2014 – Should I Continue to Rent or Is it Smart to Buy Now?

March 18, 2014


Everyone deserves to be a homeowner and it is definitely better to buy. Two great life accomplishments are buying your first home and paying off your mortgage to have a stress free retirement.  Many people refinance on average three times and never pay off their mortgage, but if you plan ahead and are disciplined it can be done.

There are many advantages to homeownership such as:

  1. You will be giving yourself a raise that your employer isn’t or cannot give you with the tax deductions a) mortgage interest b) property tax c) private mortgage insurance d) if self employed you could receive additional tax breaks
  2. Your home will become an asset.  The average appreciation of your home is about 2% a year in slower developed areas and up to 12% in others.  As you pay down your balance you will build equity in your home.
  3. If needed, with the equity you build in the home you will have the option of borrowing against the home for children’s college or wedding costs, investments or for to have a comfortable well deserved retirement.

Most people will not do it, but if you pay an extra mortgage payment each year or set up bi-weekly payments (which will be equivalent to one payment) you could pay off your home years earlier and save thousands of dollars in interest.  On a $200,000 home at 4.25% an extra payment each year of $1,416.67 would shave off about 6 1/2 years of interest.  $1,416.67 x 78 months = $110,500.26.  Why wouldn’t you want to save that money? You could travel the world!

Make sure to pay off any credit cards (but do not close them) about 90 days before you have your credit pulled for a pre-approval.  Every 20 points can equal .25% better in interest.  On a $200,000 home that could be $7,614 over a 30 year fixed mortgage.  You could buy 1,692 Lattes at Starbucks!

Also consider that rates and home values are creeping back up.  They are already up 1% from 2013.  That is a huge hike in payment.  Yes, the inventory is sparse, but if you can find a home and your offer is accepted (bad news is you might have to put in several offers and have a ton of patience to land the right one) then you can personalize the home with upgrades over the next couple of years.  Do it yourself projects are also very rewarding.  Check out HGTV or Pinterest for great ideas.

So stop procrastinating!  The day you get your keys and move in, as you lay on your mattress on the middle of the floor surrounded by tons of boxes (dead tired), it will finally hit you….YOU DID IT!

You will need 2 years in the same line of work and possibly as little as 3.5% down.  There are down payment assistance programs that can help you either with the down payment or closing costs.  Down payment assistance is available to those that meet the household income limits and debt to income ratio requirements.

Email us your loan scenario at or give s a call at 800-385-3657.

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Job Opportunities? CA BRE NMLS Mortgage Loan Officers (Brokers are welcome), Real Estate Agents, & Account Executives.  Ask about our Branch Opportunities.  Now is the time to see how PMC Can Help you earn what you deserve!  Email your resume to and visit us at!

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