Is buying a home really cheaper than renting one? Read on to discover the surprising answer.
When Buying is the Best Option
Buying a home is cheaper than renting one if:
- You intend to stay in the local area for more than four years
- You have a good credit score and are able to get a mortgage loan with a reasonable interest rate
- You buy a home that is well within your means
If you intend to purchase a home, it's important to start by getting your finances in order. Find out your FICO score, collect the paperwork you'll need to apply for a loan and check out a number of lenders to discover what your mortgage loan options are. If you find that your credit score isn't good enough, take measures to improve your score over time so you can qualify for the loan of your choice. You can also save a significant amount of money if you save up for a 20% down payment on your home loan.
When it's Best to Rent
Buying a home isn't always the best option. While your purchase will build equity as your home steadily rises in value, it will be at least three years before you break even. If you aren't sure you want to stay in town for the next few years then renting is likely to be your best bet.
Renting is also ideal for those who are working on repairing their credit and/or paying off student loans or other loans. While you don't earn a return for renting, you also don't have to worry about home repair bills, real estate taxes and HOA payments.
Would you like to find out if now is the best time for you to start looking for the home of your dreams? Mortgage Investors Group can help you answer the question. We are a mortgage lender with nearly thirty years of experience offering a wide range of home mortgage loan options to individuals of all ages and walks of life. A loan officer in one of our branches can help you assess your personal situation and make a well-informed decision regarding when to invest in a home of your own.