Are you currently renting a home, but you are wondering if now might be the time to stop renting and to start looking for a home that you can truly call your own? When deciding whether or not it is time to stop renting, there are several factors that you should take into consideration. Here is a look at the top five.
Consideration #1: Future Plans
The first thing you need to consider when deciding whether or not it is time to stop renting is your future plans. If you expect to continue living in the same area for the next five years, it generally makes financial sense to purchase a home rather than to continue renting. If you expect to move away from the area within the next couple of years, however, the costs associated with buying and selling a home will likely make renting a better financial choice.
Consideration #2: Lifestyle
You should also consider your lifestyle when deciding between renting and buying. As a renter, you are not responsible for paying for maintenance and repairs for your home. As a homeowner, however, these costs will be your responsibility. You will also be responsible for completing routine tasks such as mowing the lawn and other basic upkeep. If you are not interested in performing these tasks or if you do not have the funds available to pay for these tasks, you may want to continue with renting.
When considering your lifestyle, you also need to think about the amenities that you can enjoy as a renter. For example, installing and maintaining a swimming pool and tennis courts at your home may not be possible. As a renter, however, you may be able to afford the rental cost of a property that includes the amenities that you enjoy.
Consideration #3: Debt
If you are deep in debt, now probably is not the right time to stop renting. Not only will debt stop you from saving the money that you need for a down payment and for maintaining your home, but too much debt may also make it difficult for you to be approved for a home mortgage loan. If you are carrying a great deal of debt, you should work on getting out of debt before you start looking to purchase a home.
Consideration #4: Savings
The amount of money that you have in savings should also be a consideration when trying to determine if now is the time to buy a home. You should have enough money in savings to make a down payment on the home while also having the funds available to cover closing costs and the costs of moving. You should also have enough in savings to cover unexpected costs that may develop as part of homeownership as well.
Consideration #5: Credit
Your credit rating is another factor to consider when deciding if it is time to stop renting. If your credit is solid, you are likely to be approved for a loan to purchase a home. If your credit score is low, however, it may be better for you to work on improving your credit before you start looking for a home to buy.