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As mortgage interest rates remain relatively low and rent prices continue to rise, you may be wondering if now is the time to make the big move into a home of your own. Before you decide, consider these pros and cons from both sides of the rent vs. buy equation.
Generally speaking, all you need is an upfront deposit — often first and last month’s rent, plus a security deposit. Renters have more flexibility to move when and where they want, which is ideal if you need to relocate frequently. Once your lease is up, you can move without any financial ramifications.
Here are a few more pros for renting:
However, there are also some cons to renting. For instance, you aren’t building any equity (actual ownership in the property) and you could be subject to payment increases if your rent goes up. You’re also limited on how much you can renovate and make the place your own. And, if you’re a pet owner, you may have fewer rental options and could incur additional fees.
For many people, owning a home is a dream. It’s a place you can truly call your own, where you can renovate to your heart’s content, own pets, plant a garden, or whatever else makes you happy. It’s also an investment that could grow over time — you build equity with every mortgage payment and property value can increase, too.
Here are a few more pros for buying a home:
On the other hand, the biggest hurdle to homeownership is coming up with a down payment. Buyers also pay upfront mortgage expenses like closing costs, as well as ongoing expenses — property taxes, homeowners insurance, maintenance, and all utility costs. In addition, it’s typically more difficult to relocate when you own instead of rent since you’ll probably need to sell your home before moving.
The decision whether to rent or buy is based on a number of factors. Are you ready to settle down in one area? Do you have enough to afford a down payment and monthly mortgage payments? If so, then it could be the right time to buy. However, renting provides flexibility that is appealing to some, and it affords you time to save for a down payment.
The right decision depends on your savings and other circumstances, so take the time to thoroughly evaluate your situation before you make your decision.
Buying a home is a life-changing decision. We can help you develop the right plan to save for a home, and find the right mortgage for you. For personalized assistance in preparing for a home purchase, talk with a Citizens Bank Loan Officer.
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