Homes
Buying a house vs. Renting
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Making a decision on whether to buy or rent a house can be a very difficult one that many people get sleepless nights over. The decision is even more difficult when you keep listening to the remarks made by these real estate agents who try to induce you to buy or rent a house depending on their opinions.
Also don’t pay much attention to what you hear on TV. Real estate is local and what’s happening in places other than where you live may have nothing to do with the real estate market in your location. In fact, sometimes it’s the opposite of what the talking heads on TV say.
Since many people borrow money to buy their homes, you should first consider the ratings on your credit report. People who have bad credit scores are normally disqualified from obtaining loans. Even when they are given loans, they tend to borrow at higher interest rates since their credibility is questionable.
If your credit score is below 620 then you should consider renting a home. You can then work on repairing your credit ratings and find a mortgage after that. Make sure you challenge any errors that may appear on your credit report. Simple errors on your report can disqualify you if left unattended to. If you are thinking about buying a house, you should order your credit report online and check your credit score.
Job security is another important thing to consider before making a decision to buy a home. Many companies are laying-off workers in these recession times. If your company is one of those, it will be a bad idea to buy a home now. The compensation benefits you will get if you lose your job won’t be enough to pay your mortgage and other bills. If you are also likely to be transferred to another city or location in a few years then this might not be the best time to buy a house.
You are likely to sell at a loss if you put your house on the market a few years after buying it. If you are also looking to change jobs then you should consider renting instead of buying as your job search might take you to another state or location far from your house.
You should also compare your salary to the monthly mortgage payments. If half of your salary will be paid as mortgage then you should consider renting instead since you will have problems paying your other bills and having extra to save. You will also have trouble qualifying for a loan if you have no other source of income.
Before buying a home, you should also have enough money available to spend on repairs and other maintenance work on your new home. If you can’t afford to undertake repairs after buying a home then you shouldn’t buy it. Also if your mortgage payments are more than 3 times your rent payments then you should rent instead of buying. Hopefully potential home buyers will be able to make informed decisions before deciding to rent or buy a house.
