Should You Rent or Buy A Home?

You probably had asked this question yourself. Would buying a home make more financial sense than renting a home? Buying a home is one of the biggest purchases you’ll ever make in your life so it’s only crucial to decide if buying a home is right for you. There are many situations where renting makes more sense than buying a home, and other situations where buying will be the best choice for you in the long run. It is important to consider many factors including the time you’ll stay in your new home, the home’s prospects for appreciation, costs of homeownership, etc., before thinking of buying a home.

When is the time right to rent or buy a home?

To determine which is right for you, you need to determine whether you can afford to buy a home.

Your Credit Score

Your credit score is one of the determining factors whether you’ll qualify for a loan. If your credit score is 620 or less, it’s better to hold the idea of buying a home for a little while until you’re able to boost your credit score in order to secure the best rates on a mortgage. If you find a lender willing to give you a loan with a low credit score, expect to pay higher interest rates over the life of the loan.

Check your credit reports and dispute any errors you find, that alone could help boost your score. Pay off your debts, check your credit report regularly, pay your debt on time, do not default, are some of the good measures to do to have a good credit standing.

Sufficient Funds

Are you financially ready? Do you already have the money to put as down payment? Once you already have a new home, will there be enough budget to cover for your mortgage, housing expenses, utilities, and all of your other bills? When you buy a home, there will be a number of cost that you’ll need to take into account beyond mortgage fees. Find all costs to consider when buying a home

Job Security

When you have unsteady job, committing to any long-term expense is often scary. Also, it would be challenging to get a loan as most lenders are looking for two years of employment in the same field. Without an established employment history, it would be difficult for lenders to forecast your earning ability.

Deciding on whether to rent or buy a home is really a matter of evaluating your financial and life situation. If you can’t afford the costs of buying a home right now, prepare a budget for homeownership by setting up a savings plan to help you reach your goal.

Rent a home if it’s the best way to go at your current situation. Once your finances permit it and the timing is right, don’t hesitate to jump into the opportunity of buying your own home.