“Rent is 100% interest.”

It's a catchy way to start a conversation about homeownership, but the real financial picture is more complicated.

Renting and buying are two different ways of paying for housing, and there are situations where either one can make sense.

The better question isn't simply, “Is renting bad?”

It's “Which option makes more sense for my situation?”

What Happens When You Pay a Mortgage?

A mortgage payment can include several components depending on the loan and property.

Part of the payment generally goes toward interest, while part may reduce the principal balance of the mortgage. Property taxes, homeowners insurance, mortgage insurance, or other expenses may also be involved.

As the loan principal is reduced, a homeowner may build equity in the property.

The home's market value can also affect equity. If property values increase, equity may increase. If values decline, the opposite can happen.

So a mortgage isn't literally a “forced savings account,” but ownership can provide an opportunity to build equity that renting generally doesn't provide.

Renting Has Advantages Too

Renting can offer flexibility.

If you're unsure how long you'll remain in Western Oklahoma, aren't ready for the expenses associated with maintaining a property, or simply aren't financially prepared to purchase yet, renting may make sense.

Homeowners are responsible for expenses renters may not directly encounter.

When the air conditioner quits, the roof needs replacement, or plumbing needs repair, those expenses generally belong to the homeowner.

That's why comparing your monthly rent with a potential mortgage payment alone doesn't give you the whole picture.

How Long Do You Plan to Stay?

Your expected timeline matters.

Buying and later selling a home involves expenses. Someone expecting to move again relatively soon may evaluate homeownership differently than someone planning to remain in Elk City, Altus, or another Oklahoma community for several years.

This is especially relevant for people relocating for work or military families moving to the Altus area.

Rather than assuming you should rent or buy, look at your actual circumstances.

Find Out What You Could Actually Buy

If you're curious about homeownership, one of the best places to start is simply finding out what's available.

What does your budget buy in Elk City?

What homes are available in Altus?

Would you prefer an established neighborhood, a smaller starter home, a property with acreage, or something outside city limits?

A REALTOR can help you understand the local housing inventory, while a qualified lender can help you understand financing options and estimated costs based on your individual financial situation.

Exploration Realty helps buyers search for homes throughout Elk City, Altus, Western Oklahoma, Southwestern Oklahoma, and surrounding communities.

 

You don't have to decide whether renting or buying is better based on a slogan. Get the information, look at your options, and determine which path makes sense for your life.