Mortgage Dictionary -> Mortgage
Like many other things, getting a mortgage is becoming a fact of life. Few people can afford to buy a home when they really need one, and unless they can get a huge loan from a family member, they really don't have any other option but to get a mortgage. If you're trying to figure out whether to get a first mortgage or to continue renting, and want to know what the advantages of getting a mortgage are, you'll want to read on.
Why to Get a Mortgage Rather Than Rent
1. Cheaper Monthly Payments. The goal of renting, on the part of the landlord, is to make enough money off the rent every month to pay for the home and put some money in the landlord's pocket as well. As a result, getting a mortgage will typically end up costing you less money every month than it would if you were to rent a house. That's because there is no middle man there to take your money.
2. Building Equity. When you rent a home, you are only paying for the right to live in it at the present time. Once you leave the home, all the money you've spent over the years in rent goes no where. But when you have a mortgage, every payment you make on it brings you one step closer to actually owning the house and building equity.
3. Establishing Credit. If you are to get any other loans, or credit cards, you simply must have good credit. Getting a mortgage does help you a lot in this regard, as consistent, on-time mortgage payments will result in a higher credit score which means you'll be getting lines of credit with lower interest rates than you might otherwise be getting.
4. The Same House. When a landlord sells the house you're living in, you may be forced out by the new owners if they do not plan on renting it out to people. Thankfully, when you have a mortgage, you will not have to deal with this problem, as the house will be yours and yours alone.