Are you thinking moving and not sure which route to take? To rent or own?
There are a few things to consider when trying to decide what works best for you and your family…
Are you financially ready?
If you’re buying, you’ll need a down payment to pay upfront that will fund the equity in the property that proves to lenders you’ve got skin in the homeowner game. The amount you’ll need varies, but the standard preferred amount is 20% and that often gets you the best rates.
When renting – in most cases – there’s no need for a hefty down payment. You may have to come up with a deposit, but it’s generally a lot less than the 20% usually required for buying.
Are you ready for monthly mortgage payments?
If you’re buying, this is the amount you’ll pay each month, which in most cases includes principal, interest (both of which are amortized over the term of the loan), along with your homeowners insurance and property taxes.
When renting, you’re still required to make monthly payments and sometimes they’re more than what you would pay for a mortgage. Landlords generally require more than the standard payment for their property to allow for repairs or damage done to the property.
Are you emotionally ready?
Before you jump into the homeowners circle, you need to realize that there is a lot that goes with owning your own home. There’s repair and maintenance that you’ll be responsible for, you’ll no longer have a landlord to call. You’ll need some basic handyman skills so you do not have to pay for a repairman when minor repair needs arise.
One benefit of renting is that when something goes wrong or breaks, you simply call maintenance to repair it. That doesn’t require any money out of your pocket for the repairs and therefore some prefer this over having to take care of it yourself.
These are just a few comparisons between renting and buying. What are some factors you would consider when deciding between the two?