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Are you considering whether you should purchase your first home or rent? There are several things to think about when deciding if you want to buy or rent. We’ve listed down things you should know so that you can settle the rent or buy debate in your situation.
The first thing you should consider if you should buy or rent is how your current financial state is, including your current income and debts plus your future economic outlook.
Purchasing your first home will cost a lot more upfront but adds substantial economic stability in the long run.
Is that initial investment something that you can handle at this time? Are your finances still somewhat wavering?
If your income and budget management are walking a fine line, then buying your first home may not be a smart financial decision at this time. Focus on getting a good handle on your income and spending, then consider buying a home.
Do you plan on staying in the same place for a long time, or are you the type who prefers flexibility?
If you’re still at a point in your life where you need much flexibility, renting would be the way to go. This can be the case if you’re still exploring locations for raising your family or are planning to make a career move that requires you to move. Buying a home, in this instance, could pose some challenges once you decide to move.
Remember that real estate comes with an initial investment, and when you sell too soon after buying, you wouldn’t have paid enough towards the principle to have recouped your costs and made a profit.
However, if you plan to live in the home for at least five years or would consider renting it out should you decide to move, then investing in a first home is perfect.
To accurately determine the financial impact of renting or buying a home, consider the total cost of owning a home and the quality of life it affords. Most people only look at the monthly rent or loan payment when deciding which path to take. If monthly costs are compared, buying your first home usually wins in the long run.
Meanwhile, there are expenses you don’t have to worry about, like house repairs and homeowners insurance if you choose to rent instead.
There’s no definitive answer to whether you should rent or purchase your first home. The answer will mostly depend on your unique situation. However, if you’ve decided to buy your first home, you may contact our loan officer to help you get started on financing your home purchase.