Deciding whether to rent or buy is quite the major decision. This choice truly does affect your lifestyle and savings as time goes on, so it is very important to do your homework and be prepared when deciding. This post will talk about the pros and cons of each to make the decision a little easier for you.
Home ownership gives you a sense of stability, so if you are a person who gets restless easily or moves quite often, then this is most likely not a good choice for you. If you need to move frequently, and the housing market happens to be down, then it would be much harder to sell your home and you may actually loose money in the process. Now, if one were to rent in this same situation, you would be able to move without penalty every time your lease ends.
A very popular myth is that by renting, you are “throwing away” money each month. This is not true. Living somewhere will always cost money. The cost of a home sometimes can even be higher than the cost to rent. There are some expenses you can avoid if you rent that you cannot if you are buying such as property tax, water and sewer service, trash pickup and many more.
Renting is alot more predictable financially wise because you always know exactly how much you are going to spend per month. When you own, you may just pay your mortgage and bills, but then next month you may have to replace your roof unexpectedly. Renters would not have this unpredictably. Although, renters could have their rent increase without notice every time your lease is up for renewal.
Owning a home can be unpredictable at times over things you cannot control. The neighborhood you live in could decline, a major employer could move out of the area and the population could significantly decline. Tax deductions are not a reason to buy a home because in the end, the tax break decreases as your proportion of your mortgage payment decreases. Deciding which option is best for you goes beyond the money. It is also about comfort and your lifestyle.
When house hunting, there are a lot of different decisions that you need to make. One of the most important and critical decisions you will make would be choosing which lender to work with. There are tons of lenders out there, ready to accept your loan application, however just because they will accept it does not mean they are looking out for your best interest. Since you will be the one left with this mortgage for many years down the road, it is important to find a lender for your specific needs.
There are many benefits of working with a broker, a broker can save you a lot of time by doing a large portion of the work, when it relates to finding lenders. However, keep in mind some of the drawbacks of this. Brokers are able to earn their profits by making deals between you and the lender. The wrong match, could give the broker a high profit, but not the right mortgage for you. So make sure that you do your homework and research as well to make sure that you are getting the best deal for you!
You will also need to find out what type of lender you desire. Do you want to work with a large company, or a small company? Would you want the lender to actually remember your name? This means you might want to go towards a small lender. However, if you want the best interest rate, then a large lender might be a better option. Research, research research!
A broker is not the only way to find a lender. You can also ask friends, family or coworkers and ask about their experience. At least this way, you are asking people you trust and will have your best interest in mind.
Another great option is to ask your real estate agent. A good agent will not limit their recommendations to just their in-house lenders. Use this to your advantage and ensure that the lender you work with is also recommended by your real estate agent as well.
When hearing about a lender, whether this is recommended by a family member or real estate agent, it is important to do a background check as well. Find out what their past clients though of them, and check out the online reviews as well. Try to learn as much as you can, so that you can avoid disasters down the road. This might seem very intimidating, and scary, but just ensure that you are doing as much research as you can to make the right choice for you!