Practically everyone dreams of owning their home someday, but many people have a tough time determining when they should buy. Buying a new home can be more expensive initially, but it will also allow you to build up an incredible amount of equity over the years. Here is a look at some of the factors you will need to keep in mind while you are going through this process.
The Initial Costs
Even though most rental units require a deposit, they are nowhere near as high as the down payment on a home. Depending on your credit score and a number of other factors, the down payment could be as high as 20 percent of the home’s value. Many lenders will lower their requirements if you work within a specific industry, and that is why you should speak with a flexible lending company to see if they have any down payment assistance programs.
Ongoing Expenses
Many different variables will affect your monthly and yearly expenses, and some people end up spending more on a rental unit than they ever would on a home that they purchased. Some of the expenses you will need to keep in mind include the rent itself, mortgage payments, insurance options, HOA fees, property tax, and utility bills.
Personal Preferences
A family might want to purchase a home simply so that they can live in a place that is completely their own. Carrying out upgrades such as painting the walls and buying new appliances is generally not allowed in rental units, and that might be troublesome for you and your family. If the home is part of an HOA, then the renter might have little or no say over new rules and regulations for the neighborhood. Those who want complete control over their home and property will most likely want to buy instead of rent.
Financing Options
Renters must pay almost all of their expenses on their own, and that can be overwhelming. When you purchase a home, however, you can work closely with professionals, like those at Assurance Financial Group, company to come up with a fair down payment and monthly mortgage. If you ever decide that you want to upgrade your home or carry out any major projects, then you can speak with the same lending company about refinancing or applying for a home renovation loan.
Choosing whether you should buy or rent a home will be one of the biggest financial decisions you ever make, and that is why you must spend some time weighing your options. Making the transition from being a renter to a homeowner at the perfect time could potentially save you thousands of dollars a year and completely change the course of your life.
