Home ownership is a big responsibility... and whether you’re starting your career, settling down with a family or preparing for retirement...it’s important to carefully consider your financial position before deciding whether to rent or buy.
Renting can be good for a short term commitment, even though the monthly rent payment can often be about the same as owning a property. It may allow for less responsibility, since landlords often cover repairs and may provide appliances, utilities and even furniture. Typically, signing a lease means less scrutiny of your credit history. And there is ultimately less investment risk, should the housing market change.
However, renting often means you have less freedom to make changes within your home and you can’t profit from a move since you don’t have ownership of the property.
Buying often requires a more in-depth, up-front financial check and larger initial investment than renting. However, with a fixed-rate mortgage your monthly mortgage principal and interest payments never change and your mortgage interest may be tax deductible. Ownership may offer you freedom to make improvements.
Additionally, you may be able to gain equity in your home over time, which could be used in the future in the form of a home equity loan or home equity line of credit. And if your home increases in value, you may be able to make a profit when you decide it is time to sell.
Knowing this information, along with understanding your finances and goals, allows you to better consider your options...
If homeownership seems right for you, working with a trusted mortgage loan officer for you to determine how much house you may be able to afford is a good first step.