houseBuying verses renting a home…

When it comes to finding a place to live, you first have two options, you can either buy a house or you can rent one. Which one is right for one person may not be right for another, that is why it’s important to know which is the best option for your individual situation.

Why people rent…

There are a number of reasons why someone may rent. These can be sporadic or unpredictable income, a high debt-to-income ratio, a bankruptcy or foreclosure within the last two years, unpaid collection accounts or judgments, frequent relocating for employment or the inability to save enough money for a required down payment on the purchase of a home.

But there are other reasons too. For instance, relocating to a different city or state, where you’d rather take the time to get to know the area before deciding exactly where you want to live in the long term. All of these are perfectly good reasons to rent and they make renting the smart choice.

Maintenance matters…

An often overlooked consideration in the choice to rent or own a home is maintenance. As a homeowner, you will be responsible for any maintenance or repair issues that arise. This is a big consideration when choosing whether to rent or buy. When you rent, the property owner is responsible for repairs and it may not always be obvious that these issues can be very costly.

 As a renter you don’t have to bear the expensive but as a homeowner you will.

dollarsAs a renter, however, you are not building any equity. That is, you are not essentially saving any money with each payment. Instead of putting the money paid each month into something you will eventually own or can sell, you are putting the money into something the landlord will eventually own or sell.

How to know when it’s time to buy…

If you have steady income with a good employment history, can provide a down payment of at least 5 – 10 percent of the purchase price and are current with all debts, it may be time to consider buying a home instead of renting. In some cases, the cost of rent may even exceed that of a typical mortgage payment.

When deciding to buy, job stability is a big factor. If your job does not require frequent relocation and you plan to live in the home for at least 5 -10 years, you may want to consider making the purchase. If you need to relocate after that, you may have enough equity from the sale of the home to use as a down payment on another home.

ApartmentHome buyer checklist…

If you can answer yes to the following questions, you may be ready for home ownership. Your Connective Realty agent can help you to find the perfect home based on your individual needs.

  • Have you been employed for at least one year, but preferably two years?
  • Do you plan to live in the home long enough to build equity?
  • Can you provide a down payment and still have enough money left to pay for closing costs, utilities and home furnishings?
  • Are you current on all debts, including auto loans, credit cards, etc.?
  • In addition to any current debts that you may have, can you afford a monthly mortgage payment which will likely include property taxes and insurance?
  • Do you have the time to devote to shopping for a home and comparing interest rates from various lenders?
  • Have you checked your credit reports for inaccuracies and disputed anything that needs correction with each of the three major credit reporting agencies?

All homes for sale buttonThe decision to buy or rent is a very personal one that can only be determined after a careful evaluation of your situation. Your Connective Realty agent can show you the perfect home and a lender can tell you whether or not you can afford it, but it’s up to you to make the choice as to whether or not you are ready to make the move.