Should you Rent or Own?

Thinking about owning a home and taking the leap is a BIG step. However, the process is not as hard as people may make it seem.

There tends to always be one major element that people leave out when considering purchasing and it is the most important one. Does this fit your lifestyle? 

Here are a few questions to ponder to help you decide. 

Renting vs Owning – Which is Right for You?

If you’re thinking about moving this year, you may wonder if renting or owning is the best choice? While there isn’t a one-size-fits-all approach to the matter, there are certain questions you should ask yourself to decide.

Do you Have Long-Term Plans?

When you buy a home, you can’t move as easily as you can when you rent. If you are ready to settle down in an area and commit, there’s no question that buying is better. But, if you aren’t sure where you want to settle down yet or you enjoy moving every year, renting may be the better choice until you are ready to set up roots.

Do you Have Money for a Down Payment?

Most loan programs require at least a small down payment. When you put money down on a home, you build equity in the home right away and you make your loan more affordable. Lenders require some ‘skin in the game’ to ensure you’ll make your payments on time and not risk losing the home. Most loans require 3.5% down and another 2% saved for closing costs. 

Can you Take Care of a Home?

When you rent, the landlord oversees all renovations and repairs. When you own a home, the responsibility falls on you. If you’re able to handle the financial and physical responsibilities of owning a home, it is much better than renting. On average, it costs 1% of a home’s value to keep up with maintenance and repairs. If you are more of a handsfree type of buyer, purchasing a condo would be your best option. They handle all the heavy lifting in regard to property and building maintenance.

Can you Qualify for a Mortgage?

Unless you have the cash to buy a house (most people don’t), you’ll need to qualify for mortgage financing.

The good news is you don’t need to be rich or have perfect credit, but you should meet some or all of the following:

• Have at least a 620-credit score
• Have 3% – 5% of the sales price for a down payment
• Have a steady job and steady employment (Usually like to see two years)
• Don’t have any recent bankruptcies or foreclosures
• Don’t have excessive credit card debt outstanding (They call this DTI, debt to income ratios)

Do You Want the Freedom to do What You Want with Your Home?

When you rent, you don’t have the freedom to do what you want with it. You must get your landlord’s permission to make any changes, or even to have pets. When you own a home, you make the decisions and can do what you want with the property within the city or homeowner’s association’s guidelines. Besides, it’s better to put the equity in your own pocket vs your landlords.

Final Thoughts – Should you Rent or Buy?

Renting a home doesn’t build equity or give you a return on your investment. If you are looking for obtaining any kind of ROI, buying is the best way to go when you are ready. Just ask the people who bought their homes 5 years ago. Their values have skyrocketed!

If you have the money saved, have a stable job, and are already to level up your assets, then buying a home can be the best way to invest your money. Knowing where to buy and what to buy is key. That’s where professionals like myself come in to help assist with that process. (You are never alone in this)

Feel free to give myself or my team a call to help! Even if you are planning for the next year! Ask me how  Connect with us!