Benefits and Drawbacks: Buying or Renting

When deciding whether or not to buy a home many things need to be considered. First of all the current situation of the perspective mortgage seeker must be taken into account. Where does the person live now and why do they wish to purchase a house? If you currently live in a place that does not cost a large amount each month then the monthly cost of the mortgage might be too strenuous on your finances. For example, a person recently graduating from college that still lives with their parents would probably find paying the monthly cost of a mortgage very difficult. Alternatively a person that has been paying a high amount each month for rent probably won’t be too disheartened writing a check to the mortgage lender every month.

Secondly, does the person have a current house they own with equity in it which will alleviate some of the amount of money they must pay for the house? If a person can sell their current home, pay off their current mortgage, and have a solid amount of money leftover to use for a larger down payment will make it much easier to buy another house. This extra money used for the down payment would reduce the amount of money needed to be dished out each month because usually mortgages are repaid in a system of monthly payments.

Thirdly, are you financially secure enough to afford the huge cost of purchasing a home and repaying the mortgage loan? A mortgage is a huge monetary commitment. If you are unsure of how long you will be sticking with your current employer or plan to relocate in the near future then buying a house would probably be a financial loss. The process takes a lot of money with all the costs associated with it and usually only becomes a beneficial investment after a couple of years paying down the mortgage and building equity in the house. So if you’re financial situation is somewhat shaky or you plan to move in the near future purchasing a house would not be as good of a decision as continuing to rent and avoiding the costs of obtaining a home loan.

In the long run buying a home can be a great investment and very sentimental. Everybody needs a place to live; to reside in with friends and family, and buying a home can provide a person with a wonderful feeling of accomplishment when they can finally call a place home. It also provides a higher incentive to maintain and invest in the property because that money will be returned when the house is sold. But in order for buying a home with a mortgage to be worth it the person must be willing to live in the home for a solid amount of time in order to avoid loosing money on the deal. Hopefully you can have the great experience of being a homeowner and being able to call somewhere a “place of your own”.