Exorbitant rents and low mortgage rates in the Colorado urge people to make a home ownership decision faster than they previously expected to. Majority of the people prefer to wait for the house market to recover, regardless of the incentives of buying. In reality, there is no definite answer when it comes to deciding whether to rent a house or buy a new one.
There are a number of things that the family or potential customer has to take into consideration before making this important decision. Both renting and buying have their pros and cons. It mainly depends on your financial situation at present and your financial goals.
Regardless of the fact that you cannot build equity, renting gives you the flexibility and freedom, especially through a month to month lease system.
- Requires no maintenance.
- You can easily move out.
- You do not take the risk of a depreciating asset.
- The rent may increase, making it hard to forecast or plan.
- You will not be building any equity or possible ROI.
- No tax benefits.
- You cannot renovate or make it yours without the approval of the owner.
Buying a home may be a difficult decision especially when your financial situation is not strong, but it gives you a lot of advantages.
- Allows you to build equity.
- Benefit from tax breaks.
- The housing payment will remain stable in the long run.
- You may rent your investment or use it for another capital investment.
- Freedom of decorating it and remodeling that best fits your lifestyle.
- Settlement in a community.
- Ownership of the house is an illiquid asset.
- You will have to pay the property taxes.
- Their is a risk associated with the property value.
- You are ultimately responsible for the overall maintenance.
How long do you wish to stay? While making an investment as expensive as that of a house, you must consider the duration of your stay.
Costs of Buying?
Another important element that influences your ownership decision is the local housing market. Check for an estimate of purchase costs and rental costs of the area you are interested in. Our preferred mortgage lenders will be happy to explain to you the pre-qualify and mortgage process, which helps you to understand the cost you have to spend, and the amount you can borrow. Ensure a long term commitment to the property before investing.
Your financial situation:
Income: For an ownership loan, it is important to prove a stable income or other means of finances.
Credit score: Typically, a credit score of 620 or more is required to qualify for mortgage. Different interest rates are offered to borrowers who have a credit score above 740.
Assets: You will be required to disclose your savings for closing costs and down payments, and cash reserves to ensure a backup support in case your current financial mean is unstable.
Moving Costs: Moving can be expensive, even if you do the heavy lifting yourself. Remember to consider all the incidentals that might creep up. Even pristine or new build construction will have an immediate “honey do” list.
For the best advice and to explore all your options, contact the professionals at CO Home Base. We will come up with the best strategy for you and your family.