Are you planning on settling into a new home but are stuck on whether to rent or buy the house? Unfortunately, there is no correct answer if you should buy or rent a home. Whether to rent or buy a home depends on many factors, including your budget, lifestyle, location and personal goals.
In this article, you will learn the differences between renting and buying a home and the pros and cons of each.
Renting a Home
Many people may settle to rent a home due to its flexibility. If you do not stay at a specific location for a while due to work transfers, renting is the best for you.
Pros of Renting a Home
- There is flexibility when you transfer from your workplace or your lease expires
- There is no massive amount of upfront fees paid before you move into the house
- There is a standard monthly payment so you can plan your finances ahead
- There are no maintenance costs as the landlord handles all the repairs
Cons of Renting a Home
- You cannot customize the house to your liking
- The landlord can decide to raise the rent without any notice
- The landlord can choose to sell the house, which leaves you in a tight spot if you are not prepared
Buying a Home
Having your own home gives you the freedom to design and customize the house as your own space. Buying a home gives you a sense of security as you fully control what happens in the home.
Pros of Owning a Home
There are a lot of benefits associated with owning a house. They include;
- Owning a home gives you a sense of stability
- Unlike renting a home, owning a home is a long term investment as the house appreciates and you can sell your house whenever you want and you get a return on your investment
- You don’t have to deal with landlord issues. You are in complete control of your home
- Emotional security. When you buy a home, you give your family a safe space where they feel comfortable and free
- No uncertainty. There are no emergency issues that can arise forcing you to move out of your home
Cons of Owning a Home
The disadvantages of owning a home are way less than the advantages. Some of the cons include;
- You are responsible for all the maintenance costs
- Owning a home requires a large amount of upfront payment
- You can make a loss if you need to sell your house faster and the market price is down
How to Finance The Buying of a Home
You do not have to wait years to save to pay for your house all at once. If you have good credit, you can obtain a mortgage based on your income, assets and debts. The lender evaluates your credit report, and you will decide your payment duration.
If you do not have good credit, do not want to deal with heavy documentation or you want to close the deal fast, you can request a hard money loan from a private or individual business. In hard money loans, your asset is the collateral.They are short-term loans, which should be paid within 3 to 36 months. With the recent rate hikes, hard money loans are now even closer to the traditional rates.
Hard money loans are a lifesaver if you want to switch from renting to investing in your property and do not have a good credit score. Once you build your credit score, you can request refinancing from the bank after your payment term in a better rate environment.
Should I Buy or Rent a Home
Whether to rent or buy a home is a decision you should make based on your financial health, flexibility, future personal goals and financing. You should look at the pros and cons of each and settle on one that best suits you.
Visit our website for more information on buying and renting your home. Even if you have bad credit, you can still be a proud owner of a home and we will teach you on how to build your credit score.
Equal Housing Lender.