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Rent vs. Buy

October 14th, 2016 5:51 PM by Christel Silver

RENT VS. BUY

For some people, buying their home makes the most sense, and for others, renting is best. The decision to own versus rent is very much a lifestyle decision as it is an economic decision and is among the biggest financial decisions that many adults make.  Determining how much money you can dedicate to the purchase is an important aspect of buying your new home.

Here some questions you need to ask yourself:

  • How much money do you have to invest?
  • Can you qualify to buy?
  • How long are thinking of staying in the house?
  • What is the economic outlook for appreciation?
  • What is my credit score?
  • Are you looking in an area where the rents are high?

To determine whether to buy you first h to find out whether you can afford to buy! You also need to consider other factors, including the time you'll stay in your new home, the home's prospects for appreciation and the taxes, insurance and condo/HOA fees. 

Buying a home is costing money (closing cost).  If you believe you're going to be in a house less than three years, most experts suggest it's safer to stick with renting, unless you could afford to keep the house as an investment, as it takes about 2- 3 years to recover the cost of buying home.

Reasons to rent:

  • You want to become certain about a specific neighborhood, renting allows you time to find it.
  • This is a job transfer and you are not sure about this job, renting gives you more flexibility.
  • If you need to improve your credit score for a favorable interest rate, timely rent payments will help you. Today’s interest rates on a mortgage is based on your credit score!
  • Financially tight? You would have no money left after buying? If major repairs are necessary, you don't need to spend money: you just call the landlord!
  • The original investment is much lower!

 

 

Reasons to buy

  • If you are paying rent, you are paying your landlord's mortgage or adding equity to his or her bank account. When you own, you increase your degree of ownership in your home with every mortgage payment.
  • You can deduct mortgage interest as well as your property taxes from your income tax.
  • You also have a benefit when you sell the house with a gain – under certain circumstances: you do not owe any capital gains taxes (at this time) – so you get tax free money!
  • You can make improvements to your house – without asking the anybody.
  • If you pay – you stay: nobody can ask you to move!
  • Your mortgage is paid off: now it is your house.

If you would like to see what is good for you: Realtor.com, Zillow.com, besides other websites offer calculators where you can find out for yourself, based on your personal information.

 

Posted in:General
Posted by Christel Silver on October 14th, 2016 5:51 PM