Love and Mortgage: Should Newlyweds Buy or Rent a Home?
Somewhere in your mind, you might have an idealized image of a newly married couple triumphantly sweeping into a dream home with the wife in the husband’s arms. As corny as the tradition might seem, you can also see it as a powerful symbol — two people making their first entrance into the home they now share as owners.
Should you and your new spouse follow that example, or do you have reservations about adding a mortgage to the mix? Consider some of the pros and cons of renting vs. buying as newlyweds, and then take your time in deciding whether homeownership is another threshold you want to cross together.
Your Solution Depends on Your Situation
You’ve probably made dozens of decisions together on your way to the altar, making the call on everything from the registry to the diplomatically arranged seating chart at the reception. And now’s not the time to give in to judgment fatigue.
Take some time to evaluate the respective merits. You may find that personal finances, career aspirations and even the value you place on independence vs. convenience could influence your decision of whether to rent or buy.
The Case for Renting
Some of the reasons that could make renting a home preferable to buying include:
Lower Start-Up Costs — Moving into an apartment typically means paying some moderate expenses, such as first and last month’s rent, specified deposits and the like. Buying a home typically means spending several thousand dollars on a down payment, closing costs, agent’s commission, attorney’s fees and more. If you still haven’t figured out how to pay off the honeymoon, the initial investment could loom large in your decision-making.
More Mobility — The U.S. Census Bureau reports that after age 18, the typical American can expect to move nine times. If you happen to get a new job in a different state, you’ll have a much easier time (relatively speaking) breaking a lease than you would selling a house.
Repairs Aren’t Your Responsibility — If the toilet springs a leak at 3 a.m., a renter can call the landlord to get it fixed. For homeowners, the burden of arranging and paying for repairs, and possibly filing an insurance claim, falls entirely on them. When it comes to upkeep, a conscientious landlord can be a real convenience.
The Case for Buying
Factors such as these could tip the scales in favor of homeownership:
It’s Usually More Economical — For couples who plan to stay in the same area for several years, buying a house is generally considered the more affordable choice. The expert consensus favors ownership as a much better source of value than renting in just about every U.S. housing market. Also, you can help protect your investment with a home insurance policy that may provide coverage for weather damage, break-ins and other hazards.
Ownership Builds More Wealth — One aspect of the pro-buying argument revolves around the central idea of wealth accumulation: Homeowners nurture an investment in something that will one day belong to them, rather than simply renting space from month-to-month or year-to-year. Even if you move to a new house before you pay off the mortgage, you still have the equity you’ve built up in your current home.
A Sunnier Market Outlook — Although memories of the housing bubble bust still linger, many indicators point to a stabilized recovery. New regulations have helped curtail risky lending practices, home prices have reached realistic levels and the economy has rebounded. With mortgage rates at historic lows, 2016 could be an advantageous time to become homeowners.
Whichever Way You Go, Go Thoughtfully
The decision to buy or rent as newlyweds depends on immediate realities and long-term possibilities. Do you have plenty of money on hand? Do you have job security? When might you start a family?
You’ll need to consider all these factors, and more, as you figure out whether crossing the threshold right away is a realistic option or just a romantic notion.