Mortgage Basics: Buying or renting – what’s right for you?

Buying or renting–
what’s right for you? 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 that same 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’s
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 the move, since you don’t have
ownership of the property. Buying often requires
a more in-depth upfront financial check and
larger initial investment than renting. However, with a
fixed rate mortgage, your monthly mortgage
principal and interest payments never change. 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’s 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.

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