Should you rent or buy your house? Is a question we often ask ourselves.
In this article I will try and show you the benefits of both, which should help you to decide.
Renting a home has benefits of its own. For example, if you don’t like your location, you can easily move to another one once your lease has ended.
There are also drawbacks to renting that lead many people to buy their own home. When you rent, you are paying to live in a space that will never be yours. Let’s consider the aspects of home buying versus renting a home.
Home Buying
The true cost of home buying, is more than the down payment and mortgage. There’s also private mortgage insurance (if your down payment was less than 20% of the home price), homeowner’s insurance, property taxes, and maintenance. These costs can increase your monthly payment by 40%.
In home buying, each payment you make on your mortgage brings you one step closer to home ownership. As you pay on your mortgage, you increase the equity you have in your home. This equity can be prove to be beneficial if you want to sell your home or use it to borrow money.
It’s a pretty well-known fact that mortgage interest payments and some property taxes are tax deductible. For many, this is a very good reason for home buying. Not only are you investing your money in a valuable asset, you get a break from the federal government for doing so.
When home buying, home and property maintenance is your responsibility. You will either have to maintain the home yourself or pay someone to do it. In either case, it is an additional concern that you must take into account.
Renting
Financially speaking, maintenance is not very much a concern. It is the landlord’s responsibility to fix the plumbing if something breaks down.
Moving is easier when you rent. Of course, this depends on the amount of belongings you have, but generally speaking, people who rent tend to have less “stuff” than people who own.
Extra fees are usually non-existent. While some landlords require tenants to have renter’s insurance, the premiums are much lower than homeowner’s insurance. When you rent, all you have to worry about is the rent and utilities.
You could rent a home for thirty years and, at the end of that time, not have accumulated any equity in the property. When, if you had bought rather than rented, in thirty years, you would have a pretty sizable asset.
Rent increases are inevitable. You can expect to continue to pay higher rent each year. The only thing you can do about a rent increase is move to a property that has a lower rent.
Both home buying and renting a home have their advantages and disadvantages. When you are making a decision about home buying, it is wise to consider both the good and bad of either choice. Ultimately, you have to decide if the benefits of your decision of home buying versus renting outweigh the associated costs, whether it’s a matter of finance or convenience.
Should You Rent Or Buy Your House?
Buying a House Without Using your Own Money
Real estate is in very high demand nowadays, and it is quite normal for all of us to be willing to buy it. The problem is that the purchase of a house requires investing a hefty amount of money in it, which is often not something you have right away. So is it at all possible to buy a home without spending any of you hard earned cash? Yes, it is possible, and in this article we shall try to give you some tips on this matter, which, hopefully, can help you to buy that house you want.
The first tip to give here is to use you other assets, if you have some. If you do have some assets that are stable and strong enough, you might well be able to borrow money from those. How can it work? Very simple: your assets may serve as a security for your loan to back it up in case of missed payment. And there is one more positive aspect here: having built up strong and stable assets will make you look more financially sound in the eyes of your potential lenders, positively affecting their willingness to work with you.
Tip two: get someone to guarantee your loan. Of course, the first thing to look for should be an unsecured loan, but this option is quite difficult to find – most banks will not be willing to accept it. So the next thing you should try is to persuade someone to act as a guarantor for your loan. A guarantor is a person responsible for the loan in case some unforeseen circumstances arise. It’s not so easy to find someone who will agree to act as your guarantor, but it really is worth trying, because having a guarantor may help you get lower interest rates.
Tip three: try to find a 100% mortgage. They are hard to find these days, but it is actually still possible. The requirements on these are usually a bit tougher than those on a normal mortgage, but well, it costs you nothing to at least find out, so if you happen to find a lender offering 100% mortgages, look into this option by all means. This may well be the best deal to get, if you don’t want to spend any cash right away.
Tip four: use no-interest credit cards, if you have them. 0% cards are a great option, and buying a house is probably one of the most appropriate situations to use them. Zero interest surely gives you great advantages when doing serious property purchases.
And one final tip: only buy property at a time when you actually can afford it. Don’t try to jump over your head – you surely do not want to end up with huge debts because of being unable to repay your mortgages. Before embarking for serious property purchases, make up a detailed plan accounting for all possible factors, both positive and negative, and follow it. Thinking and planning will surely pay off.