Home ownership was once the goal of most people starting out in their adult life. If you can do it, it is still one of the best investments you can make and brings with it the security and stability of owning your own home and not having to cater to the whims of your landlord, not to mention paying their mortgage. Every penny you pay towards your rent over the years is gone forever. So the question of whether to continue renting hangs over many a renter’s head.
Sometimes it just does not make sense to buy. In areas with skyrocketing house prices, like Los Angeles, buying is no longer affordable for the average worker. If a prospective buyer can actually come up with the downpayment, which many cannot, not to mention the ability to qualify for a loan, they will need to take a look at the payments involved in the purchase. This is often an amount they are not comfortable coming up with on a monthly basis. Included in the payments will be the principal, interest, property taxes, and insurance (PITI), and if a condo is involved, homeowners dues need to be added to those payments. Yes, a portion of these payments is tax deductible, but you still have to come up with the money every month. The expression “house poor” applies here. No one wants to be a slave to house payments. What is going to happen to those annual vacations? Can you afford to buy a new car? Owning a home can sometimes be an anchor.
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