Why Buying a Home Now Beats Renting: Expert Advice on the Value of Homeownership

Are you waiting for the "perfect time" to buy a home? With so many people holding off for lower interest rates or other reasons, let’s unpack why homeownership might still be the smarter move—right now!

I’m Jan Scott, your Real Estate Mama, and today I’m joined by Rose Rauch, the mortgage gal with Magnolia Mortgage. Rose is my go-to miracle worker when it comes to navigating the world of mortgages, and she’s here to share her wisdom on why owning a home beats renting every time.

Here’s what you’ll learn in this episode:

• The financial benefits of owning a home—including building equity and tax advantages.
• How homeownership fosters stability for your family and strengthens communities.
• Creative financing options for buying a home, even with a small down payment.
• Why the home you buy today can be the stepping stone to your dream home.
• How to create a plan to move from renting to owning—no matter where you are financially.

We’ll also bust some common myths about interest rates and help you see why waiting might cost you more in the long run. Whether you’re ready to buy now or just starting to dream, this episode is packed with insights to get you on the path to homeownership.

Tune in and let’s make sure that lease you’re in now is your last!

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Email: jan@yourrealestatemama.com
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Transcript

Introduction: Why Buy a Home Now?
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[00:00:00] Jan: Why is it a good idea to buy a home now versus renting a home? So many people are waiting to buy a home for all sorts of reasons. The interest rate is going to come down for one, uh, which it may, but then the home values are going to go way up. Today we're going to talk about the value of home ownership.


Meet Your Host: Jan Scott
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[00:00:26] Jan: Hey there! Welcome to Your Real Estate Mama. I'm Jan Scott, and I'm here to help you navigate the ups and downs of buying or selling a home. I've been wrangling the real estate market for over 35 years, and trust me, with all this gray hair comes a whole lot of wisdom. I'm excited to share tips, a little humor, and plenty of encouragement to make your journey easier.

[00:00:50] Whether you're new Or a regular. I'm so glad you're here. Follow the show for new episodes every week and together we'll grow and help even more folks.


Special Guest: Rose, the Mortgage Gal
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[00:01:02] Jan: I have with me today Rose, the mortgage gal. She's been with me before and what an exciting time to have her back. My miracle worker is what I call my Rose.


The Value of Home Ownership
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[00:01:11] Jan: Today, we're going to talk about the value of home ownership. So many people are waiting to buy a home for all sorts of reasons. They think the interest rate is going to come down for one, uh, which, you know, it may, but then the home values are going to go way up.

[00:01:26] Rose: Yeah.

[00:01:27] Jan: So why is it a good idea? Yeah. To buy a home now versus renting a home?

[00:01:32] So,

[00:01:32] Rose: great question, um, and of course you and I both love to share this information a lot, um, and we seem to be doing a lot more ever since those twos and three interest rates, you know, from a few years back. So many people think those are coming back and it's really not, you know, we're going to get back down into the normal side, you know, so, um, but rates are, you know, Changing a little bit right now.

[00:01:58] So we'll see where those end.


Financial Benefits of Owning a Home
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[00:02:00] Rose: Um, that's a whole another day conversation, of course But yes, so home ownership Versus renting, you know, most people have heard, you know, it creates generational wealth, you know I mean we've heard that even in the political environment we've had, you know these last few months we've heard that Continuously, you know, it's a it's a known fact that if you own a home you have more opportunities You Own more stuff and have more equity and money, you know, later.

[00:02:32] So we are building that wealth. for our, you know, generations. So, you know, we also have tax advantages to where rent, you know, we don't have a lot of tax advantages there for the rental side, but all interest that you pay is tax deductible on your taxes. So it's, you know, that just helps overall your federal income tax return.


Community and Family Stability
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[00:02:53] Rose: Um, the stronger communities, you know, let's talk about, you know, how that, um, you know, if a neighborhood is Owner, mostly owners, you're going to have more pride, you're going to have more sense of, you know, achievement, things like that, you know, it, it changes the way you actually mentally think and look at things.

[00:03:20] Um, I went through that when I was younger, you know, and the rental side just, you know, it's a different feeling than when you actually own a home.

[00:03:29] Jan: When you kind of rent, people come and go, you can't have the. Yes. The longevity, the stability there of building relationships.

[00:03:37] Rose: With just what you said, think about our children.

[00:03:39] How, how do our children find stability if we're renting and we're moving apartments, we're moving homes continuously? You know, that's going to play a big factor into their learning capabilities, their stress levels, their overall health, you know? So it does, it definitely impacts families in a health situation as well as, you know, the mental and, and just the stability.

[00:04:03] Jan: I think that says it all, the

[00:04:04] Rose: stability

[00:04:05] Jan: of your family, of owning your

[00:04:06] Rose: own

[00:04:06] Jan: home.

[00:04:07] Rose: And the property value.


Real-Life Home Ownership Success Stories
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[00:04:08] Rose: You know, when you purchase a home, it's as simple as, so we purchased our home in 2021, and within one year, we did a few, a few upgrades, but because of the environment that we were in, they took You know, we were able to actually get that PMI.

[00:04:27] Remember us talking about our private mortgage insurance? So I only put five percent down on my home in 2021, but in 2022, late 22, we were able to get a reappraisal done because of some upgrades that we did and we were over a hundred thousand dollars of equity in the home. So, we were able to get the PMI gone.

[00:04:47] So, we were able to. It's amazing. Yes. I mean,

[00:04:49] Jan: you instant wealth almost. Yes, absolutely. Money that you would have never had,

[00:04:53] Rose: had you still been running. That was 175 off my mortgage payment that we saved because of the equity from the home growing, the value of the, the home growing there. So, yes, it's, it's huge.

[00:05:05] I mean, The home ownership versus renting is just, it's a no brainer if you can do it. Right. So.


Creative Financing Options
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[00:05:14] Jan: And you're the perfect person to show them how to do it because of all the different what loans now. I mean. Yes. There's really a lot of creative ideas out there to get people in homes. Correct. That, that you can kind of show them how to do, um, when, um, they're not sure what they need to do is just come to you and sit down and spend a few minutes with you and let you See their situation.

[00:05:36] Yes. You know, we can ask sellers to pay closing, we can ask sellers to, you know, build in some whatever they need to get them in that home for the least amount possible. Right.


Down Payment Strategies
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[00:05:46] Rose: There's so many different options and I guess this kind of goes, you know, can go right into our down payment side. You know, let's, let's kind of just talk about that a little more, um, and kind of just go through really.

[00:06:00] You know, those options that you just mentioned outside of sellers paying, you know, closing costs and prepaid. What if our loan, you know, requires a down payment, you know, and, you know, they don't qualify for that VA loan or the USDA loan with 0 percent down. How do they, how can they actually do that?

[00:06:19] their down payment if they don't have those savings. First and foremost, I'm going to try to always work with my clients to teach them and help them start that savings process and kind of set plans and things in place so that they're, they're purchasing

[00:06:35] Jan: at the right time. Exactly.


The Importance of a Financial Plan
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[00:06:37] Jan: The main thing that I hear you saying is they need a plan.

[00:06:40] Absolutely. You know, when they come in and talk to you doesn't necessarily mean mean that they may be ready at this moment,

[00:06:46] Rose: but what

[00:06:46] Jan: we need is a plan so you can look at their financials and you can say, pay this off or save this much and let's do it. And then maybe six months or a year down the road.

[00:06:56] The main thing is they have a plan. Absolutely. No

[00:06:59] Rose: plan.

[00:06:59] Jan: You're not

[00:07:00] Rose: going anywhere. You don't

[00:07:01] Jan: have a plan. If you don't start doing it, then you're not going anywhere. But absolutely. You want to make sure that that lease you're in is your last lease ever that you have to sign.

[00:07:10] Rose: Yes. Let's talk about the down payment option.

[00:07:14] So we talked about the 20 percent down. Not everybody can do that. You just heard me say that I couldn't do that, you know, and I'm 48 years old. And, you know, 5 percent is a lot of money plus your closing costs, you know, because I had to pay my closing costs in prepaids, you know, so there's a lot of money that goes into that.

[00:07:34] And I was able to do all of that and purchase a bigger home, more expensive home that last time because of the equity that I had built in the prior home, you know, but I still had only 5 percent to put

[00:07:44] Jan: down. The home that you're buying may not be your ultimate dream home, but it's a stepping stone to where you want to be.

[00:07:51] Yes. So start somewhere, even if it's not quite the neighborhood you want, not quite the size home you want, you can kind of start there. I did that with my son when I helped him buy his first home in Nashville. You know, we didn't start with a big mansion, no, but we started with something that, that served him very well at the time and increased in value, moved him to a house.

[00:08:15] Then we moved him up and then we moved him way up. So, you know, you've got to start somewhere. So don't look at, Oh, well, it doesn't have all the things that I want. Think of it as a business decision where you're starting, get what you can afford.

[00:08:32] Rose: That's actually a huge piece of what people don't understand.

[00:08:36] I have a first time home buyer right now that came to me, you know, about three or four weeks ago, and he wanted to buy a 350, 000 home. And I was like, do you understand what 350, 000 a, you know, purchase is actually going to cost you a month? And he had no idea. You know, and so it's being very realistic and listening to people.

[00:09:01] His mama had tried to tell him he didn't want to listen, and now we're actually under contract. It's a much more affordable option for him than what he started with, and it's just educating and really diving into what your goals are and making sure that, you know, you're not over spending, especially on your first home, because you don't know The budget.

[00:09:27] You don't know all those things because a lot more things go into it than just a mortgage payment. You've got your utilities. A lot of rentals have water, electricity and all those things that are paid for you. We have a lot of other things that we have to pay for. So it's really understanding that budget.

[00:09:42] But on down payments, we can, you know, look at things like yeah. Um, if you don't have 3 percent down, you don't have, you know, for a conventional or a 5 percent down for a conventional or an FHA at 3. 5 percent down, let's talk, you know, you just said that you helped your son, you know, back when he got his first home in Nashville.

[00:10:05] We can do gift funds from family members. So let's say, you know, you need 7, 000 for that down payment. Let's start with mom and dad and say, Hey, do you guys, are you guys able to help me and gift me those, the money for my down payment? Your realtor can then help kind of Negotiate your contract and have the seller pay the closing costs and everything there And then you could come personally yourself to the table with next to no money Even on a loan that actually requires down payment, you know It's just being creative and also accessing the people that's in your life, you know But unfortunately a lot of us don't have that So then what you know, we've got to do an fha loan because that's what I qualify for You Now, what's my plan?

[00:10:52] We either start saving money and doing a, you know, a, you know, planning for six months to a year down the road, like you said, or we could look at other options like down payment assistance programs. You know, there are things out there. There's some grants, um, You know, some of those are forgivable. Some of those are that, you know, It's kind of like a second mortgage that you put back there.

[00:11:15] It's usually, you know, a small small payment But again that goes against our debt to income also, you know, but to get us into that home Sometimes that is the options that we have to use


Building a Great Real Estate Team
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[00:11:25] Jan: Exactly, you know, you know i've always said and i've said this in my other episodes you need a great team It's imperative that you get a great realtor that understands the system You That knows, that has the great people, the great lenders, the great title companies, the great people that can help them, uh, wisdom and knowledge is always something that you need to surround yourself with to make your plan.

[00:11:51] Rose: It's really important to have that team because again, you know, your realtor, your loan officer are going to really work together. These are conversations that I'm going to have with. You know jan or you know, who whichever realtor you're using Because they can't negotiate that contract for you if they don't understand the full picture also um I had you know, and and there are good loan officers and they're Bad loan officers and there's good real estate agents and there's bad real estate agents I had one that I specifically had it in the pre approval letter that they needed You closing costs, you know, paid from the seller.

[00:12:33] He did not negotiate that into the contract and he had no time to talk to me to go over the client file. You know, we don't go into details on those, those files with anyone other than our buyers, but some things like that need to be known by the real estate agent because how can they negotiate and do their job if

[00:12:50] Jan: they don't know?

[00:12:51] You're exactly right when it comes to a good realtor, a good lender. They're good ones and they're bad ones. You know, we moved into the area three years ago. I had to go through four doctors before I found one that I really, really enjoy and felt like that I could trust. Realtors and lenders are no different, no different.

[00:13:12] And so if you're a buyer out there and you are looking. For that right lender and that right realtor, don't be afraid to step up and ask questions. On my very first podcast, I have the five questions that you need to ask a real estate agent before you commit. And that great real estate agent, if they're really good, will have an excellent lender just like you, Rose, that you know I can trust.

[00:13:35] I can trust you if I send somebody to you and you look at it and you say, look, we need a plan here. It may not be right now, but maybe next year, but let's do a 12 month plan. Those are the kind of people you need in your life to be able to help you make sure that you never have to sign another lease because you need to be paying yourself.

[00:13:57] More than you need to be paying your landlord. And the only way to do that is to make sure that you get into your very own home.


Conclusion and Final Thoughts
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[00:14:04] Jan: Thank you, Rose, for being with me today. What an amazing information that we had. Yes. Thank you for having me. I really hope you enjoyed this interview with Rose today. If you have any questions, send them to Jan@yourrealestatemama.

[00:14:18] com. And as always, I'd like to leave you with some mama wisdom and inspiration. You may be discouraged because of higher interest rates, all the guidelines you have to go through to apply for a mortgage, but can I remind you today of what the Bible says? In Mark 10, 27, Jesus looked at them and said, with man, this is impossible, but not with God.

[00:14:41] All things are possible with God.

[00:14:47] Well, that's a wrap. Follow the show for new episodes every week. Don't forget to leave a review, rating, or comment on your favorite podcast platform. Feel free to send me an email to jan@yourrealestatemama.com. I love hearing your questions and comments, and I'd be happy to help you find a great real estate agent anywhere you live.

[00:15:11] Be sure to follow me on Facebook @YourRealEstateMamaPodcast. Until next time, y'all take care, happy house hunting, and remember, you should always listen to your mama.