The merits of renting versus owning are important to consider before starting down your path to homeownership. Your finances, individual circumstances and desired living situation are all large factors to think through when selecting the direction to take. To help you make the decision right for you, First Choice Loan Services Inc. will focus on renting versus buying in light of your finances and your lifestyle.
Your Financial State
When choosing between renting or owning a home, it’s important to weigh your current finances with your long-term financial goals. What budgetary changes do you need to make? Do you have savings accounts, education funds or retirement needs to consider? Are there available funds for a down payment and closing costs? How much can you reasonably set aside for maintenance and repairs? And what about property taxes, insurance, utilities and other homeowner fees? First Choice Loan Services can help you to think through these questions to help decide what the right path is for you.
On one hand, renting may mean a lower monthly payment and perhaps more disposable income. Any maintenance or repairs are typically a phone call away, with your landlord assuming responsibility for those costs.
On the other hand, your rent payment is a sunken cost without any long-term payoff. There are even instances when rent can cost more than a monthly mortgage payment. Furthermore, in most cases, your rent is subject to increases by your landlord. If the cost of renting surpasses your budget and comfort level, then a move may be needed which will incur additional costs.
If you choose to pursue homeownership, there are several expenses in the home-buying process such as upfront fees, down payments and closing costs to consider. You’ll also need to add on the cost of moving and settling in the home. On top of those, the financial responsibility of maintenance and repairs falls on you as well. With all these expenses, homeownership could potentially feel out of reach.
On the plus side, budgeting can be much easier once you own your home. Fixed-rate mortgages by First Choice Loan Services mean your monthly mortgage payments aren’t set by a landlord, which makes future budgeting far easier. You can also build home equity over time that contributes to your personal wealth. Depending on your location, there are even tax benefits* that can help to offset the total cost of homeownership.
Beyond your finances, your lifestyle is important to consider when weighing the benefits of renting vs. owning a home. If you believe the responsibilities of homeownership are too great for your lifestyle, then now may not be the optimal time to purchase.
Renting grants you greater freedom to relocate in the event you want to change jobs or find a new living situation. However, renting is not an investment in the future. If you reasonably predict yourself staying in the same location for the foreseeable future and believe that monthly rent is a waste of your resources, then perhaps homeownership is the right path for you.
One of the beautiful parts of homeownership is the ability make your house your own. You can paint, landscape and remodel to fit your lifestyle. This isn’t always the case when renting which limits how comfortable and settled you may feel.
As you can tell, there are quite a few considerations to take into account when the time comes to choose between renting and owning. Your First Choice Loan Services Loan Originator is ready to assist you in evaluating your current situation and helping you come to the decision that is right for you.