You’re thinking about moving from apartment life to a house, but you’re not sure you’re ready – financially or otherwise. How much yard do you want and how will you maintain it? How much living space do you need? What are the challenges of home ownership versus renting a home? What will the financial aspects be, particularly when it comes to protecting your home and belongings?
While you’re considering whether to rent or buy a house, here are five questions to consider that may help you figure out what’s best for you.
1. Are You Financially Prepared to Buy?
One early step toward home ownership is saving a down payment. You’ll also want to review your credit history and perhaps pay down outstanding debt before applying for a mortgage. If you’re just starting your career or have recently added a large amount of financial obligations such as a wedding, student loans, or a new car, you may need to get your finances in order before you buy a house. You’ll also want to figure out what your costs will be to close on a home, should you decide to buy. Keep in mind that, if you do decide to buy, some homeowners insurance policies provide a discount when you bundle multiple policies, such as auto. Be sure to look into this and other ways you could possibly save some money.
2. What’s Happening in the Local Real Estate Market?
Reviewing the local real estate market can help you determine when the right time is to buy vs. rent a home. If home prices are rising, you may feel motivated to move up your time frame and buy something before you’re priced out of the market. This may mean stepping up your savings plan and forgoing other large purchases, like a new car. Or you may decide to continue to rent for a few years, hoping that prices will level off or drop. Rising or falling interest rates can also affect the real estate market and likewise your buy vs. rent decision, as they will affect the overall amount of your mortgage payment. Read Full Artcile