Even though we’ve been living in an era of historically low interest rates for quite some time, if you’re looking for a new place to call home, it may or may not necessarily be best to move ahead with a purchase.
While it is true that owning a home can include you in the “American Dream,” doing so for the wrong reasons could end up to be a nightmare for you financially – and potentially put you in a situation that can take years to get out of.
Before searching for your next abode, then, there are some questions to ask yourself in order to help in determining whether or not to sign on the dotted line as a tenant or an owner. These include the following:
- Do you plan to stay in the home for the long-term or the short-term?
- How much do you have available for a down payment?
- Can you get pre-approved for a mortgage?
Whether or not you plan to remain in the home for a long duration can be key in deciding whether you should rent or buy. According to Realtor.com, buying becomes cheaper than renting after approximately 12 years.
If you purchase a home, you will also have to have a down payment, as well as be qualified for the financing that you need (unless you plan to pay for the home in cash). Typically, it is best to have a down payment of at least 20% of the total purchase price, as this will allow you to forgo paying an additional monthly amount for PMI (private mortgage insurance).
If are leaning towards buying a home, there can be numerous advantages to doing so, such as being able to make improvements based on your wants and needs (as versus your landlord’s). You will also be able to build equity over the years.
If you’re still not sure which option may be right for you, give us a call. We can help you to clear up any of the questions or concerns that you may still have before moving forward.