Step 1: Decide if you want to buy instead of rent

Are you buying your first home? Or buying a home for the first time in a long time? Buying a home is a big decision. Not only is it one of the biggest financial investments you will make in your life, but also it is a commitment to yourself, your family and a new community.

 

Making the purchase decision

Should I buy or should I continue to rent? Buying a home has both advantages and disadvantages, and it is important that you consider both sides before making the leap.

When you purchase a home, you are taking on the responsibilities of ownership, many of which are financial. You will now have to pay the following:

  • Mortgage(s)
  • Taxes
  • Insurance
  • Maintenance
  • Homeowners fees for a condo, co-op or association (if applicable)
  • All utilities

With careful planning, you will have it all worked out so that you can afford to meet these obligations without breaking your budget. But also keep in mind that with a house you can’t as easily pick up and move. There is no giving 30 days’ notice. If you get a new job in a new area or you simply decide you want to try living elsewhere, you’ll need to sell your home, or if you can’t sell it, then you have to rent it out. This puts you in the position of being a landlord with a whole new list of responsibilities.

On the personal side, there is the very real pleasure of being master of your castle. You can put a nail in the wall to hand a picture without worrying that you might not get all of your security deposit about. If you want a pet, you don’t have to be concerned about what the neighbor next door will say. In short, there is a kind of freedom that comes with homeownership that cannot be experienced as a renter.

Here are a few possible benefits of homeownership:

  • Pride of homeownership. Having a home of your own gives you a sense of pride  and the freedom to live as you wish. You make changes to your home to suit your tastes and lifestyle.
  • Homeownership builds wealth. Over time, a home typically appreciates in value, and at the same time you gradually increase your wealth as you pay down your mortgage.
  • Stability. With a home purchase, you set down some roots. You may find yourself more settled and committed to connecting with neighbors and improving your community.

Advantages of Renting:

  • Greater mobility. If you plan on moving within the next five years, or even daydream about moving, stick with the renter’s market. A house is not only a home, it’s an investment , and one of the biggest commitments you’ll ever make. Buying and moving too soon could cost you your investment and then some.
  • Monthly costs. Often, the monthly cost of a mortgage, utilities and maintenance is higher than rent – though this isn’t always the case. Conventional wisdom states that homeowners can comfortably afford a house that costs roughly two-and-a-half times their annual income. If you can’t fit that in your budget quite yet, you’re better off renting.
  • Maintenance and repairs. When you rent, repairs are the landlord’s responsibility. When you own a home, you have to make the repairs yourself or pay someone else to do them.

While investing in a home may seem to offer stability, freedom and a positive financial return, this is not a guarantee.. Hence, the question— to own or not to own?

If you are ready to purchase a home, we have tons of resources available for you in the “I’m A Homebuyer” section of this website or you can contact our Home Hotline at 844-995-Home and connect with a housing expert.

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