Buying or renting a house has always been a passionate debate over decades. When it comes to finances, both sides have valid points. A common argument we generally come across against renting a home is why should you pay a monthly rent to your landlord instead of building a home for yourself in the same amount?
But in reality, there are many questions you need to ask yourself before you decide to buy or rent a home.
Are You Financially Fit?
Are You Financially Fit?
The actual cost of owning a home is higher than many anticipate. If you get a holistic view of all the related expenses, owning a home might become difficult.
It is a common belief that every dollar you put in rent, you will never be able to see it again. In contrast, buying a house is an investment and makes more sense than renting. But paying rent is not always a waste of money.
Renting a house means you are paying for your shelter and you do not have to spend a massive amount of money on mortgage and utilities, taxes, interest payments, maintenance of appliances, and yard expenses of everyday wear and tear.
Make sure that the expenses of owning a home do not sacrifice your retirement or other goals. If you are not financially ready to own a house, then paying rent would be a wiser choice for you.
How Long Do You Plan To Reside?
If you are in a city and plan to live there permanently, you can think of owning a house. But if you plan to live for two to three years, then renting a home might a better option. Owning for a home just for a few years and paying for its interest and maintenance would be an extra headache for you, so renting is not the wrong place to land.
The relationship home prices and interest rates share is inverse. When the interest rates are lower, home prices tend to increase. Buying a home when the interest rates are higher can be an additional weight on your finances.
Calculate Your Monthly Payments
Before you rush into buying a home, you need to know that you will need a certain amount of money to complete the transactions and maintain it. Calculating your monthly payments and ensure that you can comfortably cover the cost of homeownership.
Ownership of a home brings a mortgage monthly and a massive amount of maintenance, and adequate emergency reserve. If you are at a point in your life where you can afford all the expenses, go ahead and buy your own home.
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