Renting vs Buying A Home

When you are choosing between buying a home and renting, there are a number of things you will have to take into consideration. This debate is a never-ending one and some people will swear that buying a house makes more sense from the perspective of an investment, while there are some who will say that renting is the way to go. There are definitely some tax advantages to owning real estate and you can potentially earn equity/ pay off the mortgage note after a certain number of years. Let’s take a look at the benefits of both:

Benefits of Renting:

  • The costs of acquisition are lower- Unless you are able to qualify for a zero down mortgage loan & the closing costs are paid by the seller, typically, you will invest around 3.5-7% of the purchase-price for the down payment & closing costs if you have an FHA mortgage. In case of a conventional loan that figure will be in the 13%- 23% range, in comparison to the cost of around 1 to 3 months of a rent payment.

  • Lower Qualifying Standards- FHA & some government-insured mortgage programs have much more flexible qualifying guidelines in comparison to most conventional home loan programs. But when it comes to paperwork, property management companies and most landlords do not ask for much

  • Freedom To Move – When you choose to rent, it’s also much easier to move once the contract expires. If you are new to a community, or have a job that requires you to relocate frequently, renting is a much better option

  • Lower Maintenance & Cost – When you live in a rented place the property management company will fix anything that breaks etc within 48-hours or less. You also don’t have to pay any property taxes, carry homeowners insurance or worry about rising interest rates

Benefits of Owning:

  • Dependent on HOA and county rules, you can have pets without paying hefty deposits

  • Choose the color of your walls

  • Have peace of mind security

  • Enjoy certain tax benefits

  • Have stability

  • Property will appreciate

In addition to this, your net worth increases and there is potential for earned equity. And so, both these options have certain advantages. The choice you make will be dependent on your specific situation. Contact ResMac Home Loans for more detailed information.