Buying vs Renting? What is better for you?
Home ownership is the "American Dream," right? Owning a place to call home, being able to paint the walls purple if you like, that's what everyone wants. Isn't it? The reality is there are pros and cons associated with buying a house. Understanding them can help you make the best decision for your goals.
Pros for buying:
This may seem obvious, but there are 3 main reasons to buy a home.
Financial Advantages - A home is an asset which should appreciate over time, providing wealth building opportunities.
Pride of Ownership - s a homeowner, you can control the environment in which you live. If you want those purple walls or granite countertops.. knock yourself out.
Roots - Regardless of your family size, there is a natural desire to be part of a community: having a local coffee shop, grocery store, etc.
Payment flexibility - When you're renting, you have until the 1st, 3rd, or maybe even the 5th of the month before some serious late fees kick in. With a mortgage, you have until the 15th before a late fee is assessed on your monthly payment, allowing greater flexibility in your budget.
Cons for buying:
Upkeep - You are responsible for all maintenance and repairs to the property. Things can get costly when unexpected issues arise.
Credit Implications - If you're 30 days late on your mortgage payment, it can have a serious negative impact on your credit.
Initial Investment - While saving up a 20% down payment isn't required to purchase in most cases anymore, some funds will be required to purchase a home and you should be prepared for that. Even if you are getting down payment assistance, it's still a good rule of thumb to have at least 2% of your home's purchase priced saved for costs like earnest money deposit, inspections, appraisal, and moving expenses, etc.
If you want to take a more detailed dive into buying vs renting, download my eBook, Does Owning a Home Make More Sense than Renting? Buying a home is a pretty big decision and you should weigh your options carefully, giving some thought to your lifestyle and goals.