Is it halal to buy a house in the US with the intention to sell it in 10 years or so in an attempt to not waste money on rent?
Rent is not a waste of money. It's the more affordable and wise decision for the majority of people.
As a renter you don't pay property taxes, you don't pay any maintenance to appliances or the building, and you are free to move to another house or another city whenever your family or work situation changes.
On top of that, within 10 years, you're definitely, without a doubt, going to actually pay less in rent than in payments for a house. Because the first ten years have most of the bank interest front loaded on it. So if your house is $450k, and it was mortgaged for $600,000 over 20 years, you're likely to own only about 25% after ten years, not 50%.
So during ten years, you are paying about 3k monthly in monthly mortgage payments whereas you'd pay 2.25k in rent for the exact same house as a renter. Plus with mortgage you have annual taxes, building insurance and maintenance for any appliance or repairs. Then, when the 10 years are over, you are still in about $350,000 debt!
Buying a home would be a better option financially only if you buy with more than 20% downpayment, and get an excellent term over a shorter period of time, to minimize the interest you'll pay on it. Do not buy a house with a 5% downpayment even if your credit allows it, to because you'll end up paying a lot more unnecessary money on mortgage insurance.
As a renter you don't pay property taxes, you don't pay any maintenance to appliances or the building, and you are free to move to another house or another city whenever your family or work situation changes.
On top of that, within 10 years, you're definitely, without a doubt, going to actually pay less in rent than in payments for a house. Because the first ten years have most of the bank interest front loaded on it. So if your house is $450k, and it was mortgaged for $600,000 over 20 years, you're likely to own only about 25% after ten years, not 50%.
So during ten years, you are paying about 3k monthly in monthly mortgage payments whereas you'd pay 2.25k in rent for the exact same house as a renter. Plus with mortgage you have annual taxes, building insurance and maintenance for any appliance or repairs. Then, when the 10 years are over, you are still in about $350,000 debt!
Buying a home would be a better option financially only if you buy with more than 20% downpayment, and get an excellent term over a shorter period of time, to minimize the interest you'll pay on it. Do not buy a house with a 5% downpayment even if your credit allows it, to because you'll end up paying a lot more unnecessary money on mortgage insurance.
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Abdelrahman Amer
flanbin
Definitely
Hussambu
+1 answer
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