Is renting or buying right for you? The decision to buy or rent depends on your current financial situation, your future plans and the lifestyle you want to live. Both options have their own set of benefits and potential drawbacks that should be carefully evaluated. I had the chance earlier this week to talk with Fox 16's Deedra Wilson on air about what you should consider when deciding to rent or buy.
#1: Money
Buying is a great option if you have reliable income, can afford to make at least a 3.5 percent down payment, have good credit and want to build equity. It’s important to also maintain a savings account – don’t spend it all on the house. Should any unforeseen issues arise, like a long-term illness or unemployment, you’ll want to continue to maintain your mortgage payments. And don’t forget … if you’re a Veteran or a first-time home buyer you may have some financing options available just for you.
#2: Maintainence
This is an extension of the money factor. Closing on a house is not the end of your financial investment. You will need to make sure you can afford to take on home maintenance and improvement projects. As you’re thinking about your home buying budget it’s a good idea to build in some extra financial cushion to cover renovations and other projects you’ll undertake as you move in.
#3: Mobility
If you’re going to stay in your home at least 4 years, it’s a good idea to buy. If your lifestyle or career requires you to move frequently or suddenly, you’re better off renting. It takes time to build equity and you want to make sure you get your money back when you sell and move.
#4: Market
Mortgage rates continue to remain at historic lows, so it’s still an ideal time to invest in homeownership. That being said, however, you should buy a house when you are ready and not just when the market says. It’s a very personal decision.
Interested in buying a home? Download our free ebook on the Easy Keys to First-Time Home Buying. We'll take you through the financial prep, the house hunting, mortgage process and closing.
