BuyingVerses Renting A Home
Whenit comes to a home, you have two options: buy or rent. What is right for one person may not be rightfor another, which is why it's important to know which is the best option foryour individual situation.
WhyPeople Rent
Thereare a number of reasons why someone may either choose or be forced to rent,including sporadic or unpredictable income, a high debt-to-income ratio, abankruptcy or foreclosure within the last six months, unpaid collectionaccounts or judgments, frequent relocating for employment or the inability tosave enough money for a required down payment on the purchase of a home.
MaintenanceMatters
As ahomeowner, you will be responsible for any maintenance or repair issues thatarise. This is a big consideration whenchoosing whether to rent or buy. Whenyou rent, the property owner is responsible for repairs and it may not alwaysbe obvious that these issues can be very costly.
HowTo Know When It's Time To Buy
Ifyou have steady income with a good employment history, can provide a downpayment of at least 5-10 percent of the purchase price and are current with alldebts, it may be time to consider buying a home instead of renting. In some cases, the cost of rent may evenexceed that of a typical mortgage payment.
Whendeciding to buy, job stability is a big factor. If your job does not require frequent relocation and you plan to live inthe home for at least 5-10 years, you may want to consider making the purchase. If you need to relocate after that, you mayhave enough equity from the sale to use as a down payment on another home.
HomeBuyer's Checklist
Ifyou can answer yes to the following questions, you may be ready for homeownership. Your REALTOR® can help you tofind the perfect home based on your individual needs.
· Have you been steadily employed for at least oneyear, but preferably two years?
· Do you plan to live in the home long enough tobuild equity?
· Can you provide a down payment and still haveenough money left to pay for closing costs, utilities and home furnishings?
· Are you current on all debts, including autoloans, credit cards, etc.?
· In addition to any current debts that you mayhave, can you afford a monthly mortgage payment which will likely includeproperty taxes and insurance?
· Do you have the time to devote to shopping for ahome and comparing interest rates from various lenders?
· Have you checked your credit reports forinaccuracies and disputed anything that needs correction with each of the threemajor credit reporting agencies?
The decision to buy or rentis a very personal one that can only be determined after a careful evaluationof your situation. A REALTOR® can show you the perfect home and a lender cantell you whether or not you can afford it, but it's up to you to make thechoice as to whether or not you are ready to make the move.