Is it better to rent or buy?
I’m worried about buying and the market falling further and being in negative equity. Is it better to rent long term?
Asked on Jun 26 2012,
General in London |
It makes no sense to rent if you can afford a mortgage, if you can’t get a mortgage, then you have no choice but to rent. If you buy a property with a mortgage, as long as you can make payments, in the end you own your own home. If you rent, you effectively pay another’s mortgage and at the end, you own nothing! If you can afford a mortgage and will live in your home for more than a few years, you should not be in negative equity. If buying a new build or hugely pay over value for a property, you might have to wait a lot longer for your property to be worth what you paid, but again as long as you make payments, you own your own home in the end. Renting long term is not a choice many make if they can get a mortgage, it doesn’t make financial sense. Most people, who buy property, buy it to live in. Developers need to concern themselves with getting a bargain and making money. Ordinary home owners buy property to have a home of their own and often something they can release equity from in their retirement years. My only advice would be to not borrow more than you can afford, if you can afford to buy your own home, do it! Because there will always be ups and downs in the property market, many wait for prices to fall, only to miss the boat and get priced out of what they want because prices rise again. Prices have fallen, but the market won’t stay stagnant forever, it will pick up and prices will rise again…they always do.
Answered on Jun 26 2012,
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