Renting or Buying a Home? Consider the Pros and Cons of Each
Part of the American Dream is to own a home with a white picket fence, lush landscaping, and a beautiful family living inside. But does this make sense for everyone? Is renting or buying a home the best choice for you in your current situation? Renting may appear to be less expensive, but with rental prices on the rise, and low interest rates, you could potentially own a home with lower monthly payments. Home ownership, however, does generally require a down payment and a credit history.
When making the decision between renting or buying a home, here are some pros and cons to consider:
There are many benefits to buying a home, including:
- Building equity
- If you itemize, there can be tax benefits for some mortgage costs*
- You can decorate and customize your home to your exact tastes
- You will never be forced to move due to landlord decisions out of your control
- If you have a fixed home loan, your monthly payments are predictable and consistent.
- Intangible benefits such as pride of ownership, accomplishment, a feeling of permanence and a sense of community
The disadvantages of buying a home are:
- You need adequate savings for a significant down payment and other closing costs
- Higher maintenance and repair costs, and some may be unexpected emergencies
- More time spent on maintenance and projects
- There is always a chance your home can lose value in certain economic conditions
- Property taxes can be costly and increase with home values
Deciding on Renting or Buying a home? Jeff Berman, The Mortgage Go To Guy, can show you what you can afford. Call 214-989-7700 today.
The benefits of renting a home are:
- Fewer up front expenses are required. Likely, you will need to give first and last month’s rent and a security deposit, but you will not need a large down payment.
- Repair and maintenance costs are less, if at all
- Relocating is easier if you need to move
- More flexible and less responsibility
- Savings can be used for other investments other than down payment
- Property taxes are paid by the landlord
And there are some disadvantages to renting a home:
- Rental fees don’t build equity, they just go to the landlord
- Limits on how you can personalize the space
- Subject to rental increases
- You may need to move due to landlord decisions such as property ownership changes or poor management
Questions to Think About When Renting or Buying
When asking the question of renting or buying, the answer may not be obviously clear, so it’s important to look at your specific situation. While financial considerations are important, there are other factors that also need to be a part of the conversation. Do you have the savings available for a down payment while still being able to save for retirement? Do you like to move a lot, or do you prefer to settle down in one place? Are you ready for home maintenance and projects, or do you prefer maintenance-free living? Is your area currently in a buyers’ or sellers’ market? Is home ownership or renting a better fit with your current and future goals?
Is renting or buying right for you? If you decide that home ownership is the best choice, it’s important to select a real estate agent and mortgage lender with a wealth of experience to guide you through the home buying process. Jeff Berman, The Mortgage Go To Guy, has the expertise to advise you on the best financing to meet your needs, and help you determine what you can afford. He will work hard to get you the right home loan and put you in the home of your dreams! Call Jeff Berman, The Mortgage Go To Guy, at 214-989-7700 or complete the form below.
Jeff Berman, The Mortgage Go To Guy, at PrimeLending mortgage company serves the north Dallas suburban area including Dallas, North Dallas, Plano, Frisco, Allen, McKinney, Carrollton, Addison, Richardson, Murphy, Wylie, Prosper, Lovejoy and all of DFW. With over 25 years’ experience and having managed or originated 20,000+ loans in his career, Jeff is uniquely qualified mortgage lender to help you with your home loan needs.
*PrimeLending is not authorized to give tax advice. Please consult your tax adviser for tax advice for your specific situation.