Posted by admin on April 2, 2018
How to Know If You Should Be Renting or Buying a Home
The decision to rent or buy a home can feel daunting, but there are certain factors you can consider that make this choice a little easier. In a world where the market is always changing, and families move state more than ever, there are a few simple questions you can ask to determine if you are ready to buy a home.
Are you going to move or stay put?
Generally, if you will not be living in the same area for more than three or five years, then you are better off renting. Considering how long you will stay in an area is important because closing costs take a long time to recoup. In most areas, two years is not enough time for a house to increase in value and provide you with a net gain upon moving.
Are You Ready for Responsibility?
Owning a home is a big step and comes with multiple responsibilities. Without a landlord, you become the one who needs to arrange for repairs and maintenance. With a little research, you can find out how often to perform certain tasks such as changing air filters or having your roof inspected. Talking to friends and family members who own a home is another great way to find out more about future responsibilities.
Do You Like Tax Breaks?
When you own a home, you can claim mortgage interest and property taxes from your federal tax obligations. This is not the only way owning a home can be a good financial decision. A home loan often has lower interest rates than other loans, which means you pay less interest overall and more toward the value of your investment.
Owning a home is a big step and it is important to compare the pros and cons verses renting. In many cases, buying is better, but there are rare times when renting is the way to go. Once you decide to buy a home, you will need to secure a lender and start house hunting.