1. activerain.com http://activerain.com/blogsview/4711756/are-you-seriously-still-paying-your-landlords-mortgage-
Lance Owens
(RS)
Are You Seriously Still Paying Your Landlords Mortgage?
Aloha, Lance Owens (RS) , Kimi Nagatoshi (RS) , your KonaHomeTeam, bringing you the latest in Real Estate
News.
There are some people that have not purchased a home because they are uncomfortable taking on the obligation of
a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a
mortgage - either your mortgage or your landlord’s.
As The Joint Center for Housing Studies at Harvard University explains:
“Households must consume housing whether they own or rent. Not even accounting for more
favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while
households that rent pay down the principal of a landlord plus a rate of return.
That’s yet another reason owning often does—as Americans intuit—end up making more financial
sense than renting.”
Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management atFreddie
Mac, explains another benefit of securing a mortgage vs. paying rent:
“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your
mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next
three decades.”
As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to have equity in your home that
you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.
The graph below shows the widening gap in net worth between a homeowner and a renter:

2. Bottom Line
Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore,
owning might make more sense than renting since home values and interest rates are projected to climb.