The topic of renting versus buying a home is an age-old debate and a major decision that impacts your finances and even lifestyle. Which one you decide on should depend on your finances, your handle in responsibility and future goals.
There are also other factors to consider when deciding on whether or not you should continue to rent, or take the plunge and purchase a home. The investment might outweigh the cons, but it’s wise to keep these things in mind when literally choosing your next move.
Can you afford it?
This is probably the most important thing to consider, as most people don’t tend to think about the long-term financials when owning a home. Down payments and escrow are just the known upfront costs when purchasing a home, but keep in mind that unknown circumstances can happen, and it is best to be prepared for them. It is advised to have about six months worth of savings in case of emergencies such as losing your job, replacing appliances or repairing anything.
Other things to consider are taxes, home insurance and mortgage insurance. These are not accounted for when you see what your monthly mortgage is, but they are added on to the monthly bill. Fortunately, lenders take note in the above and account for your current debt, credit score and job status to ensure you aren’t a liability to give a loan to. They will let you know what they think you can afford month-to-month, but it is up to you to have emergency savings.
What aligns with your future goals?
No one knows exactly where they are going to be tomorrow, much less the long-term future. It’s wise to keep your goals in mind when considering to buy or rent. If you are unsure of any of where you’ll be, or even if you want to stay in your current area, putting down roots might not be a good idea.
Buying a home is only a beneficial investment if you are set on staying in it for five years or more. As with most investments, they have a slow return, but they are worth it if you’re patient. While no one can predict their future, renting is a lot more flexible of an option in case you do decide to move.
If you’re having trouble deciding on whether it is the right time to buy, consider consulting a real estate agency like Greg Spears Realty.
What type of home do you want?
Some people want a turn-key, move-in-ready home right off the bat because dealing with repairs and renovations isn’t their style. Others don’t mind a fixer upper – a home with good bones and structure that needs new paint, new floors and whatever else to make the home more their style. With the ever-popular home renovation shows, the latter has become an increasingly favored option, and it does have its benefits. Homes that need repairs have a much lower price tag, but in turn, you’ll have to pay for said repairs, or spend the time doing them yourself to save some money. That being said, unless you are a handyman, or don’t mind shelling out more cash to renovate your potential dream home, then purchasing a completed home might be your better option.
There are so many things to consider when buying a house that many people don’t really think of. If you have more questions or would like to start your house hunting journey, it is best to contact a real estate agent who you trust. They can help guide you in the preapproval process, answer any questions or concerns you might have and make sure your first time home buying experience is stress-free.