Buying
Verses Renting A Home
When it comes to a home,
you have two options: buy or rent. What
is right for one person may not be right for another, which is why it's
important to know which is the best option for your individual situation.
Why
People Rent
There are a number of
reasons why someone may either choose or be forced to rent, including sporadic
or unpredictable income, a high debt-to-income ratio, a bankruptcy or
foreclosure within the last six months, unpaid collection accounts or
judgments, frequent relocating for employment or the inability to save enough
money for a required down payment on the purchase of a home.
Maintenance
Matters
As a homeowner, you will
be responsible for any maintenance or repair issues that arise. This is a big consideration when choosing
whether to rent or buy. When you rent,
the property owner is responsible for repairs and it may not always be obvious
that these issues can be very costly.
How To
Know When It's Time To Buy
If you have steady income
with a good employment history, can provide a down payment of at least 5-10
percent of the purchase price and are current with all debts, it may be time to
consider buying a home instead of renting.
In some cases, the cost of rent may even exceed that of a typical
mortgage payment.
When deciding to buy, job
stability is a big factor. If your job
does not require frequent relocation and you plan to live in the home for at
least 5-10 years, you may want to consider making the purchase. If you need to relocate after that, you may
have enough equity from the sale to use as a down payment on another home.
If you can answer yes to
the following questions, you may be ready for home ownership. Your REALTOR® can help you to find the
perfect home based on your individual needs.
· Have
you been steadily employed for at least one year, but preferably two years?
· Do you
plan to live in the home long enough to build equity?
· Can you
provide a down payment and still have enough money left to pay for closing
costs, utilities and home furnishings?
· Are you
current on all debts, including auto loans, credit cards, etc.?
· In
addition to any current debts that you may have, can you afford a monthly
mortgage payment which will likely include property taxes and insurance?
· Do you
have the time to devote to shopping for a home and comparing interest rates
from various lenders?
· Have
you checked your credit reports for inaccuracies and disputed anything that
needs correction with each of the three major credit reporting agencies?
The decision to buy or rent is a very personal
one that can only be determined after a careful evaluation of your situation. A
REALTOR® can show you the perfect home and a lender can tell you whether or not
you can afford it, but it's up to you to make the choice as to whether or not
you are ready to make the move.
Posted
by ShirLee McGarry Author, Freelance Writer, Realtor® with All American Realty - Salt Lake County Area, Utah
Copyright© December 26, 2011 SJM Investments, LLC All Rights Reserved
Copyright© December 26, 2011 SJM Investments, LLC All Rights Reserved
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