To rent or to buy? It’s the question that everyone has to ask themselves when it comes to finding a place to live. Buying a home is a big step and a good investment – you’ll build equity and your monthly payments go toward owning your home outright someday. On the other hand, buying is more complicated than renting and can come with unplanned extra costs. There’s no one-size-fits-all answer, but here are a few things to consider to determine the right option for you.
Your financial situation – The costs of buying a home go beyond your monthly mortgage payment. The home buying process involves closing costs, legal fees, appraisal fees and more that can add up to thousands of extra dollars. Ongoing costs like property taxes and home repairs are your responsibility – there’s no landlord to call when something breaks. Make sure you consider all of the costs of purchasing a home before you take the leap.
Your lifestyle – If your career or a sense of adventure have you hopping from city to city every few years, renting may make more sense for you. Buying and selling a home are long processes that can keep you held back from taking that next opportunity.
Your market – Depending on where you live, buying a home could actually be less expensive than renting. Do extensive research on both the real estate and rental market in your area.
Your future plans – A general rule of thumb if you buy is to plan to live in your home 5-7 years in order to recoup the costs buying and to build equity. While you may not know exactly where you’ll be in five years, consider what your goals are for that timeframe before buying a home.
If need help deciding whether you should rent or buy, talk with one of our Home Loan Specialists today.