It's important to keep the possibility in mind that you could be on the hook for other hidden homeownership expenses and plan well in advance. Here's how.
A roof over your head is a basic necessity of life, and thankfully, it’s one that the majority of people enjoy. But if you’re financially solvent, you have a choice: should you rent a home or buy one? It might not be as straightforward as you first think, and here’s what to take into consideration.
Renting a Home
Renting gives you greater flexibility. You can move to a new home by merely letting your rental agreement run out. There’s no need to sell your property with all the stress and uncertainty that involves. The downside is that this flexibility works both ways. Although there is some legal protection, in the end, your landlord owns the property and can decide whether you can continue living in it.
It’s also usually a lot quicker to move into a rental property once you’ve found one that suits your needs. There’s much less legal work involved than with buying a home, and the whole process is much more straightforward and less expensive.
If you live in rented property, most significant repairs will be taken care of by your landlord. It may be quicker and easier to fix minor problems yourself, but you won’t be hit by sudden large expenses if, for example, your heating system needs replacing.
Renting is often the better option if your credit rating isn’t perfect, or if you’re not sure what your long-term future has in store for work or family. Home Lending Pal does work with a lender that can get you approved with as low as a 580 credit score. A home loan is a significant burden and needs to be considered carefully before committing to it.
Buying a Home
Buying a home often works out cheaper in the long run. A rental payment needs to cover the landlord’s mortgage, taxes and fees, repairs, and usually an amount of profit. Your monthly mortgage payment will likely be substantially lower, although of course, you’re responsible for all maintenance and other costs.
Paying your mortgage is an investment in your future wealth, compared to rent payments which offer no returns and build no assets. You’ll have an inheritance to pass on, or the opportunity to sell your property for a more financially comfortable retirement.
Owning your home gives you the greater security of residence, so long as your finances stay in good shape. If you’re planning a family, ownership provides greater stability.
When you own your home, you can do whatever you see fit with it. You have a free hand with the decor, home improvements, and furnishings. Over time, you can alter your own home to perfectly suit your needs and tastes.
Lastly, the pride of ownership is an often-underestimated benefit. A property you own just feels more like a home than does one you rent.
Buying a home is a crucial choice with consequences that can last a lifetime. If you’re not sure about your long-term plans, renting is probably the most sensible option. However, if you’re looking to settle down, and you also feel secure about your future, buying your home offers the most appealing benefits.