Should I Rent or Buy a Home?
Buying a home part of the American dream. And, for the majority of us, it’s the biggest financial investment we’ll ever make. At some point in our lives, most people face the question “Should I rent or buy a home?” All too often, this question is not properly answered. What should be considered when deciding to make the jump to a home loan or maintaining the status quo in your rented space?
What to consider when renting
While weighing the options between renting a place to live or buying a house, there are many options to consider. With so many options to choose from when renting, making the final choice can be difficult. Here is a list of things to consider:
- How much is rent each month?
- What would it take to break the lease?
- What utilities are included?
- What would happen if there was a maintenance problem?
How much is rent each month?
The first consideration is the amount you are willing and able to pay each month in rental fees. You must determine your price range and set a maximum amount for the rent. By searching within an established rent range, you ensure that you only look at viable options.
What would it take to break the lease?
Many times in life we run into unexpected obstacles that we have to prepare for the best we can. When looking to rent, it is important to see what it takes for you to break the lease, if a situation came up that forced you to move. Before signing, find out the penalties for breaking the lease under extenuating circumstances.
What utilities are included?
Some utilities may be covered in the rent, and others may not. Wifi and cable TV are some of the amenities that may not be included that you would want. If any wanted utilities are not included, you need to add them to the cost to see if you are spending a reasonable amount of money.
What would happen if there was a maintenance problem?
Ask the building owner if there were to be an emergency, how quickly will they be able to respond. You need to make sure there is not a certain business you have to use, or if you just report the problem to the landlord and they will take care of it from there.
Renting may seem simpler, but there are more things to consider other than the monthly amount you are paying. When deciding what option is best for you, these are a few things to look at as part of the bigger picture.
What to consider when buying a home
When weighing the options, opportunities, and drawbacks of buying a home, there are many points to consider that will make the process easier for you. For many people, a home is their first large financial investment. With that in mind, one must consider many things such as:
- Can you afford it?
- How long are you going to be living in the home?
- Is it worth the money?
Can you afford it?
At the end of the day, when you buy a home, it becomes your own. Many factors play a role in the financial side of the home buying decision; how much are the monthly costs, do you have the savings for a down payment, what are any repairs going to cost? Sit down and do the math, and be realistic when taking into consideration whether you should rent or buy. Consider all the cost of owning like insurance, taxes, and maintenance. Then compare it to the rent side of the spectrum.
How long are you going to be living in the home?
Another factor to consider when buying a home is how long are you going to be there. Many young professionals move around in the early stages of their career. But when it comes to home ownership, the longer you plan to stay, the better off you are buying. If you plan to stay less than 5 years, you might want to consider renting. Buying and selling cost money and a huge amount of time and effort. More often than not, adults that are fresh out of college are looking to buy a “starter home”, but if plans fail and things are not going as good as expected, are you going to be content with having to stay there longer?
Is it worth the money?
Real estate is a competitive market; you may find sellers that require higher down payments than others. This will make you mortgage payment lower but this is not advisable if it is done at the expense of your life savings. If you are putting all your savings into a down payment, what is going to happen when you need to repair something? Whether you buy a brand new house or an older house, there is always going to be unexpected costs that come up that will have to be taken care of. When you are doing the math you need to take into account the unexpected expenses.
If you choose to rent, you are missing the value of owning an asset. But some people say renting is like putting money in someone else’s bank account every month. At the end of the day, no matter how much money you have paid in rent, you still do not own it, you own nothing. Rather than if you decide to buy a home, although it may seem like a riskier investment, in the end, it’s still yours. Many people argue that you should own a home one day, because you will end up paying it off, rather than paying rent for the rest of your life.
VA Loan Spot will refinance and purchase at 100% loan to value and can approve as low as 530 credit score with job gaps. They can also approve loans for vets who are at least 1 year out of bankruptcy or short sale. Finally, they do jumbo loans with no interest rate hit (up to 1 million). Call us today to learn more about how VA Loan Spot could help you live your American Dream.
Bobby Atkisson is a seasoned mortgage professional who provides high quality financial services to military members and veterans. With over 14 years experience in the lending and financial industry, his mission is to provide high quality mortgage programs with the most competitive interest rates. For expert advice and guidance on VA Home Loans and Refinance, contact Bobby today at 800-537-2050.