You could be gaining home equity instead of building someone else's wealth.

If you're ready for your own place, considering downsizing, or relocating you're likely pondering the pros and cons of rent vs. own. Which is best? The answer to this the question of rent vs. own will certainly differ from person to person. There are lots of considerations to make. Before you get much farther, take a look at the following information about rent vs. own and types of home loans.


rent vs own


In some respects, renting affords flexibilities which owning does not. For example, if you can't afford nor have the ability for upkeep and maintenance of your home, renting might be the best choice for you. Frequently, rental/lease contracts include maintenance items such as lawn care, snow removal, and repairs to be covered by the landlord.  Having said that, many people view renting as throwing money away. Rent dollars add to someone else's wealth while owning your own home adds to your own personal wealth.

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rent vs. own


Home ownership is typically considered a personal wealth builder because traditionally you're building long-term equity in your home. Depending on the local market, home location, and condition, your home could be gaining significant appreciation.

Homeowners are certainly afforded the most flexibility where changes to property are concerned. If you want to paint, landscape, or remodel, you can. There's no landlord to stand in your way.

One of the biggest hurdles to homeownership is downpayment. Many people don't consider it an option because they can't afford a 20% downpayment. If you're in this boat, you might be surprised to learn that there are home loan options out there which don't require a 20% downpayment. Learn about loan options HERE.

home loans

Home Loan Options

If you're considering rent vs. own and are one of the thousands who simply can't afford a traditional home loan downpayment, don't fret! There are lots of programs available for people in your shoes. Take a look at the following home loan options.

Conventional loans are considered to be the most traditional type of mortgage. This type of loan is not insured by the government, rather, it is backed by private lenders/banks. In many cases, insurance on this type of mortgage is paid by the borrower through private mortgage insurance (PMI). Conventional loans are typically the hardest to qualify for due to the fact that they are not insured by the government. Downpayment requirements for a conventional loan range from 3% to 20%. Most conventional loan lenders require the borrower to have a credit score of at least 620 to qualify.

Federal Housing Administration (FHA) loans are government backed. This type of home loan was designed to help first-time homebuyers. They're easier to qualify for, allowing for lower credit scores, and requiring down payments as low as around 3%. The drawback is that mortgage insurance premium (MIP) is required for the life of the loan.

VA (Veteran Affairs) loans are guaranteed by the U.S. Department of Veterans Affairs and are available to active and veteran military personnel as well as surviving spouses. The loan is provided by private lenders and guaranteed by the VA. This type of loan requires no minimum credit score, no downpayment, and you are not required to pay mortgage insurance. A borrower's length of service, duty status, and character of status are all taken into consideration when determining eligibility. 

USDA (U.S. Department of Agriculture) loans were designed to encourage the purchase of rural and suburban homes while helping lower-income home buyers. Eligible homes require no down payment and credit score requirements are lower than conventional loans.


Missouri Home Buyer Assistance Programs

Missouri homebuyers can qualify and take advantage of the assistance programs through the Missouri Housing Development Commission through programs such as their First Place Loan Program and Next Step Program. See what types of programs they offer and how to qualify HERE.

If you're ready to take the next step toward homeownership, our experienced real estate team can help. Complete the form below or call us today! (816) 262-8077

realtor st. joseph mo


Ramseier Group
Keller Williams, St. Joseph
(816) 262-8077
3915 Beck Rd.
St. Joseph, MO 64506