Buying vs Renting Facts You Need to Know

By information.com — Published September 18, 2017

Buying vs Renting Facts You Need to Know

Deciding whether to buy or rent a home is been an on going debate when managing your finances and making important decisions about the place you live in.

Positive facts when buying your home:

  • Mortgage payments go towards paying down your own home.

  • Home appreciate value is yours. Though it often takes years, it is still a solid investments in most cases.

  • Long term security benefits.

  • You may change or renovate your home as you wish

  • You can sub lease part of your home with new services like AirBnB.

More things to consider when buying a home:

  • You will be required to make a pretty sizable down payment.

  • You will be required to get a home appraisal which costs anywhere from $300 to $700 depending on the home and firm you choose to go with.

  • You will be required to get a home inspection in most cases. Banks require a through home inspection done before approving a loan.

  • You will be required to get Homeowner insurance by your lender. The cost for homeowner insurance changes depending on the value of your home, location and other factors.

  • Your mortgage monthly payments are due every month for fixed 15 - 40 years.

  • You might have to obtain private mortgage insurance in case your down payment is less than 20% of your home value.

  • Repair and maintenance costs.

Renting a home

Renting a home is often a lot simpler than buying a home. When you rent a home, your costs do not involve all the upfront and on going payments as when you buy a home.

Facts when renting a home:

  • A personal credit and background check is often done by land lord

  • Normally a one month Security Deposit is required. Though, some land lords require 3 months security deposit. This varies, depending on your land lord.

  • Monthly Rent. Just like mortgage payments, your rent is due every month, however, when you rent the money goes to the land lord, and not towards any equity or investment that belongs to you.

  • Utilities and Maintenance. Depending on your location and land lord, you may or may not have the utilizes and maintenance included in your rent.

Use our partners Buy Vs Rent calculator to figure what what would work best for you!

 

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