Everyone wants to live in a home that is comfortable, affordable, and conveniently located in an area of your choosing. This raises the question of whether to rent or purchase a home. There are many pros and cons regarding owning vs renting.
The advantage of renting is that your housing costs end with the paying of rent and utilities. Yard upkeep may be involved in a house rental. If a hole develops in the roof or other repairs are necessary this is the responsibility of the property owner. In addition, they must pay for things such as fire and accident insurance, and other expenses. Another advantage is that you can move to another location any time you desire, of course after your lease/rental term is over.
One disadvantage is that you are not allowed to make additions or changes that you feel would better fit your lifestyle. You may not be able to change room colors, replace carpet, and in many cases you are not allowed to have pets of any kind. In addition, your rent can be raised at the end of the lease.
• Home Ownership
Advantages of having your own home include doing whatever you wish with the property as long as it meets the city or county building code. Changes can be made so the décor matches personal desires and allows the home to reflect the personality of the buyer. In most cases your equity will also grow the longer you own your home since you are paying down the Principle and Interest and building value with your improvements to the home.
Of course with home ownership you are committing yourself there until you decide it is time to move and resell the property. This includes having to make regular monthly payments, over a longer period than your rental lease would be. These payments must be made regardless of changes in personal financial income. In addition, allowances must be made for home insurance, property taxes and upkeep maintenance.
If a home is to be financed by a bank or other lender there are things such as interest rates, points and amortization involved. When broken down into simple language, this consists of the following:
When purchasing a home you will have the option of paying additional points at the time of purchase. When paying points you will have a lower interest rate over the life of the loan.
• APR or Annual percentage rate
This is the rate you pay each year that includes interest and any additional costs, such as a trust account set up to pay your annual taxes.
• Amortization, in housing, refers to spreading periodic payments over an agreed period.
Whether renting or purchasing it involves the life style you desire and your financial situation. There are many pros and cons in each situation. Renting avoids many costs involved in home owning but may subject a family to crowded conditions or other problems, but you also have nothing to show at the end of your lease. Purchasing a home means taking on the responsibility of upkeep, taxes, insurance, and other expenses but it is also an investment that grows over time. Therefore, owning vs renting should be carefully considered to determine which would fit your income and life style.
If you are ready to examine what owning would look like for you and your family please give Jeff a call 513.607.6079 or send him an email firstname.lastname@example.org.