The Financial Flexibility of Homeownership
While homeownership might provide more stability—rent increases every year, while mortgage payments stay the same—some still prefer to rent their home. After all, it does appear to be the cheaper option at first glance. If you’re caught at these crossroads, consider this: though it might initially cost more to own a home, there could be better long-term financial benefits to it than renting—especially if a financial crisis hits.
Landlords Would Never Do That
A landlord would never help you stay afloat by lending you back last month’s rent. It’s also unlikely that a landlord would let you suspend or lower rent payments during a financial crisis. They definitely wouldn’t let you challenge the valuation of their property.
Lenders, however, give you options in times of financial unease. You can apply for mortgage forbearances (delay your payments) or modifications (change your terms). You can also choose to refinance, which might save you money if you find a lender offering lower interest rates. Additionally, you have the right to challenge a county tax assessor’s valuation of your home to lower property tax obligations.
Money saved by adjusting loan terms or refinancing could have a big impact in your life. If, however, those options don’t interest you, there’s still another way to leverage owning a home into financial stability: home equity. While rent payments go into your landlord’s pocket, mortgage payments become equity. By securing a reverse mortgage or home equity loan, the equity in your home could be turned into emergency cash.
Financial Stability in Times of Crisis
Whether you’re saving money through refinancing or taking advantage of the equity in your home, homeownership could offer you more access to cash in times of crisis than renting. Being able to subsidize medicine and grocery costs, transportation, and more critical, daily expenses could make all the difference in making it through tough economic times.
That’s why we at Open Mortgage are always here to discuss your home-financing, refinancing and equity options. Visiting OpenMortgage.com today is a great way to learn more about our services and to start talking with home-financing professionals.