As modern day television will portray, the American dream is to own a home and have an address to call our own. Before pulling the trigger and setting up the mailbox on the front lawn, there are a few factors to consider when choosing to buy a home versus renting a home.
Look at Your Situation
The first task is to assess your current situation, both financially and mentally. Take in all the factors that come along with purchasing a home and settling in, for example the schooling district, property taxes, and the work commute. Check out the average rent and home prices that fit your size needs and specifications within a particular area to get a sense of what works for you.
Can You Afford a Home Right Now?
The next item on the agenda is to decide if you can afford to purchase a home. Since rates are down at the moment, it is a great time to buy a home, pending you can afford it. If you are buying a home for the sole purpose of using it as a pawn in the investment game, be careful; you never know what the health of the market will be when you want to sell. According to Bankrate.com, you should not spend a dime more than 28% of your monthly income on your mortgage payments, interest, taxes and home owners insurance.
Write a Pros and Cons List
Lastly, decide whether the pros and cons balance each other out if you were to buy a home, hopefully pulling out more pros than cons in the long-term scheme of things. Owning a home comes with a ton of responsibilities; if something breaks, it is up to you to fix, as opposed to calling a landlord and having them deal with it. On the contrast, you can update your home in a manner which you feel adds to your home’s resale value. Also, keep in mind that owning a home comes with home ownership tax breaks, a perk you do not reap when renting.
If you decide buying is your next move, contact On Q financial to guide you through the mortgage and loan process!