Home Buying vs. Renting

This is the time of year that the weather is nice and people want to be outside looking at houses. With the end of school quickly approaching, job transfers will take place and new homes will be purchased. This gives you the summer to move and get adjusted before the new school year starts.  The big considerations are:

Renting:

With the beauty of renting an apartment or a home, you pay the landlord a certain amount each month. The landlord is responsible for paying the mortgage, insurance and taxes on the property, plus maintenance. Renting is also a psychological freedom to owning; you are not locked in for 30 years.  At most, you probably have a 12-month lease agreement.

Buying:

On the other side of the coin, renting can feel temporary. If you want to establish a household, renting might not be the best way of going about it.  With renting, you could be limited to things like not being able to paint the place and have certain animals.  You can make it homelike, but with some people, there can be a void.  With buying, you are responsible for everything, but at least you have ownership. You just need to plan ahead by doing preventative maintenance on the home and/or putting a little extra cash aside in savings for the unexpected.

Additionally, owning might be a cheaper alternative than renting these days. Your mortgage payment, even when factoring in taxes and insurance, may be less than what a landlord charges for rent. Also, homeownership currently comes with tax benefits and builds equity over time.  Of course, the future of the home mortgage interest deduction hangs in the balance, but real estate taxes are still fully deductible.

Keys to Qualify for a Mortgage

Generally you need a good credit reputation; it is important to show you have a steady source of income. Have you saved any money for a down-payment, and what kind of home are you wanting to purchase?

If these points peak your interest and you have questions about the renting or buying process, our mortgage department would be happy to talk with you and discuss your specific situation.