Renting vs. buying is a debate that is on the mind of many Americans. Well, there are pros and cons of renting or home buying. The bottom line is that we all need a place we can call home, and have a sense of belonging. Before making the big decision on whether to rent or buy a home, you need to research well.
Are you struggling to decide whether to go for home rentals or start your home buying process? In this post, we feature the two sides of either of these options. My objective is to help Americans make a decision when it comes to renting vs. buying.
1. Mortgage Repayment vs. Rent Cycles
To decide on whether to go for home rentals or settle for home buying, it is important we evaluate what each of these decisions will involve. If you choose home rentals, you need to be prepared to get into monthly rent cycles. On the other hand, home buying may require a well-laid plan to ensure timely mortgage repayments.
Reasons you may choose mortgage over rent
- For a vast majority of Americans, it is not easy saving a lump sum to buy a home in cash. A home mortgage makes home buying affordable. By taking a home buying mortgage, the homebuyer spreads the repayments on the home loan over a certain period. The amount repaid every month could be higher compared to monthly rent, but the advantage is that you pay for a certain period only. This is unlike rent cycles where you will not stop paying for as long as you live in home rentals.
- The mortgage repayment amount is a predetermined figure so long as you choose a fixed interest rate. Thus, the homebuyer is able to plan his or her finances. This is because it is clear that a certain amount needs to be repaid on a monthly basis for a predetermined number of years. However, for home rentals, the property owners choose the rates by which to increase the amount of rent. This makes it difficult for the renters to have a clear financial plan.
Why Rent could be Preferable over Mortgages
- Not everyone qualifies for a mortgage! Owing to the disqualification, a huge percent of Americans prefer to remain renters.
- The mortgage application process is lengthy and tedious, and so not a viable solution if you need a home urgently. This occurs especially when you are relocating to a new town to chase a business opportunity
As we have illustrated, renting vs. buying a home requires proper though to what you are getting into. Thus, if stuck on whether to take a mortgage or to keep paying rent, we hope this part will be a revelation.
2. Consider Flexibility
Do you prefer living in one neighborhood for years or you prefer a mobile lifestyle? This is more of a personal preference.
- If you prefer an option where you can pack and leave overnight, you are better off choosing home rentals. With home rentals, you just need to issue a notice of intent to vacate to the property owner, and you are free to go. This is so long as you have met all the preset conditions, with reference to the lease agreement.
- However, if you are looking for a place to call home especially after retirement, home buying remains the better option. Consider that selling your home could require months of waiting.
Ideally, renting a home is better for those in business and want to be able to move at any time. On the other side, home buying is ideal for families looking to have a place to call home at any time regardless of one’s career. The reality is that many Americans will prefer renting when traveling to cities and have a home where they can raise children.
Well, when it comes to measuring success in life, one’s net worthy counts. For renters, you cannot claim ownership of that property you are living in. However, for homeowners, they have full entitlement so long as they are to date with mortgage repayments. In that regard, most Americans will prefer home buying as it comes with an opportunity to grow one’s net worth. Remember that paying monthly rent amounts to helping the property owner clear the mortgage, which is equivalent to building his or her net worth.
4. Do you Prefer Having Freedom to Customize Your Home
Home rental comes with restrictions on home improvement. For instance, you cannot repaint the home without express authorization from the property owners. This means that renters do not have the freedom to make any room additions or build a granny unit within the same compound.
However, home buying means you are the property owner and can do anything just to customize your home. Thus, if you prefer the ability to customize your home, choose home buying over home rentals.
Renting vs. Buying can be a tough decision to make. However, with the insights shared in this document, I hope you are able to make a decision. Do you feel that home buying is the better option? Talk to experts to help you understand the options you have when it comes to borrowing home buying mortgage.