Determining whether or not it is the right time to buy a new home or rent one will be based off an individuals particular situation. Renting a home and buying one both have some advantages that come along with them, but you who must decide which is the most affordable option to choose. You also need to understand that the current real estate market is very volatile and if you do purchase property in this market, you run a good chance of the value going down in the coming years.
Finding a place to rent should allow you to save a significant amount of money when it comes to the short-term perspective on things. Renting has less of an impact on an already suffering financial situation than owning a home. When you own a a home you have property taxes and upkeep of the property that can run several thousand dollars a year. But you will have some tax benefits form owning property that may outweigh some of these costs. Rent payments are also generally much lower than a mortgage payment and other obligations seem much easier to manage when your overhead cost is down.
Many people choose to rent a home while saving up enough funds to put a down payment on a new home in the future. You can get a substantial increase in your quality of living from renting a home or apartment instead of financing one.
One important factor to remember if you are looking to make a purchase right now is the current condition of the nation’s housing market.
Many mortgage professionals will advise people to stay wary of buying at this point in time because housing prices may still be falling. During 2008 a lot of borrowers made a mistake by purchasing a new home because home values started to decrease. Well I’m sure no one knew just how much prices would fall, and now even those who just purchased a little more than a year ago owe more on their mortgage than their home is worth. So please keep that in mind and keep a close eye on the market.
You do not have to be a millionaire to own your own property, but it’s important to note that it will be much more expensive than renting a residence. Buying a home should never be done without proper planning, as it’s usually the biggest purchase a consumer will ever makes in his/her life. Take your time! Planning out a purchase according to your own financial situation should be done with tact and careful planning strategy.
Here on LoanSafe.org we have a mortgage calculator that determines if it is better to rent or purchase a home based on the data you input into it. Please click here to use our Rent vs. Buy mortgage calculator. It will help your tremendously. You can also join our popular mortgage forum with over 32,000 other borrowers who are helping one another with their homes and loans.
Here are a couple other basics you should consider when making this decision.
Credit report: Is your current credit rating above or below 650? If so you may find it difficult to find a lender who is willing to offer a home loan with that kind of score. However, there are lenders who do offer this but with it you will receive a high interest rate and probably an adjustable rate or option ARM loan. These are terrible loans and you want to stay away from them. This is one major reason why our housing market is such a wreck. It would be very wise of you to work on rebuilding your score before making a purchase.
Job stability: Do you have a career you feel is stable? People need to realize that just because they may have a career that is paying good now, will it be around in the future? Many borrowers make the mistake of purchasing a home of high value just because they got a raise or currently have a well paying job. But is this a job or is it a career? Does your employer frequently hire and fire employees? does your job require relocation every couple of years? these are all things you need to keep in mind when making this decision.
So all in all, would right now be a better time to buy or rent a new home? For most borrowers who are still in their young ages, the decision to rent a home will be determined by the their current financial standings. Hopefully, sooner than later, a renter will amass enough funds to make a complete house purchase without the need for payments on a continual basis. For older individuals, buying a home is usually a more likely choice. Years of working, accumulating retirement payments, and retirement itself have probably made it easy to own a home without having to worry about a job in order to make payments.