Is Renting Better Than Owning A House
At some point in their lives, nearly everyone has to answer the question to the great debate: is it better to rent a home or to own one? The answer depends largely upon your current situation as well as your future plans though different people might have different views.
- Considering Your Financial Situation
When deciding whether it is better to rent or own, the first thing you should consider is your current financial situation. Generally, the money that you pay to rent a place to live will be generally less compared to what you will pay to purchase a home. Even if the amount you pay to purchase a home is less than the amount you pay to rent a place, there are additional expenses involved with home ownership. You should not forget that the landlord pays for repairs and the maintenance of the home when you rent it. When you become a homeowner, you will have to pay for maintenance too. Hence, be sure that you are financially ready to take on this liability before you purchase a home.
- Thinking about the Future
Before you decide whether you should own or rent, you should also think about your future plans. Purchasing a home may be a better decision if you intend to live in the area for several years. However, it is generally better to rent if you will only be living in the area for another year before moving somewhere else. This is due to the fact that living in a home for merely a year will not give you a great deal time to build equity in the home and the cost of closing and other expenses connected with purchasing a home may make it more costly for you to buy than to rent.
- Check Your Credit Rating
Another issue to think when deciding between renting and owning is your credit rating. If you have a bad credit rating, you will finally pay a higher interest rate on your mortgage. This can end up costing you thousands of dollars over the life of the loan. Therefore, it is probably better for you to rent for at least a little while longer until you have managed to rebuild your credit. Once your credit rating has improved, go ahead and think about purchasing the home of your dreams.
Some people automatically think that purchasing a home is a better financially decision than renting. While this is the case in many occasions, it is not necessarily the case for every person's situation. Hence, it is vital to think about your personal situation carefully before deciding what is right for you.