Why we decided to buy instead of rent
Three years ago, we moved across the country and almost went under financially when it took 16 months for our old house to sell. I immediately promised that I would never buy a house again. . . . Until last month when we signed on the dotted line for a home once again. Here is what changed my mind:
No more moving
Obviously we cannot tell the future for certain, but my wife and I plan to never move away from our current location. Even if my job situation changes, we are committed to staying in the Denver area. We really enjoy the weather, the culture, the mountains and above all, our church. A year ago, we expected that we could move at any time.
We have been looking for a lower cost rental for the past six months. The payment on the home that we have purchased, including taxes, insurance, PMI, capital and interest is well over one hundred dollars less than our rent payment. On top of that, we are building equity and have more freedom to make the house a “home”. Mrs. Stew was always a little frustrated that we could not do whatever we wanted as far as painting or altering the property. Purchasing a home gives us that freedom.
Low interest rate
We qualified for an incredibly low interest rate. It is a five-year ARM, but even if the rate is raised the maximum amount after five years, we will still have a pretty good rate plus five years of equity. I hope that we will not have too much trouble refinancing at that time.
Low down payment
After all is said and done, we will have taken possession of this property without spending much more than a deposit plus rent. We were able to take advantage of one of the government programs available to new homeowners right now. I am not a huge fan of the government being involved in the mortgage business, but sometimes you have to do what you have to do . . .
Our new place has some versatility as a future rental. It is not a large place, but the layout will allow us to sublet a room or two when our kids go to college or move out. If we decide to move to another place, we will be able to turn around and rent it outright. The key is that we do not have a great deal of money tied up in the property, giving us flexibility in the future.
The bottom line is that this little house has everything we need and we are paying less per month than we were before.