4 Questions To Help With The Decision Of Buying Or Renting
Buying a home is a major life event that requires careful consideration in order for you to comfortably make the transition into being a homeowner and paying a mortgage. If you're still on the border between renting and buying, it's a good idea to sit down and consider if you're ready for such a large responsibility. The following questions can all help give you some insight into whether you're ready to buy a home or should continue renting.
Do You Have a Reliable Income and Savings Reserve?
Even if your potential mortgage is similar to the amount you're currently paying for rent, it's important to consider the consequences of not being able to afford your mortgage. Skipping or being late for mortgage payments repeatedly can lead to the home being foreclosed, so it's important that you have a reliable income to depend on.
A large savings reserve can also help provide some security in the event that you fall ill, are injured, or are out of work temporarily.
Can You Afford the Neighborhood You Want?
While you may be able to afford living in your dream neighborhood while renting, it may not be an option when you begin house searching. Neighborhoods in a city can vary greatly in their home price ranges, so you'll want to make sure that you'll be happy with a neighborhood that you can comfortably afford to live in.
Do You Intend on Staying in the Same City?
With how big of a decision buying a home can be, it's a good idea to make sure that you plan on living in the same city for the next few years. If you're not sure that your current city is where you want to be, avoid buying a home since you may not be able to sell your home for what you paid for it. This can be especially true if you buy in a neighborhood that is still growing and home values are unsteady.
Are You Prepared for Repairs and Maintenance Work?
The biggest thing you'll need to consider before buying a home is whether you're comfortable with all the maintenance and repair work involved. Renting can be easy in this regard since your landlord is responsible for the general care of the unit, so moving into your own home can be a major change. Putting aside around $1 per square foot of the home is a good rule, allowing you to have money aside for annual maintenance.
Preparing to buy a home can be stressful, but the decision to buy can be easier if you know what to expect. Considering the above questions can help you pick between renting and finally taking a look at homes for sale in your area.