Buying vs. Renting: What Makes Sense for Your Family?

The quickly approaching fall season means school will be starting soon. Many homebuyers will feel the time crunch and eagerly pursue any housing possibility to get their family situated before classes begin. This always brings up the age-old debate – is it better to buy or rent your home? Before you sign on the dotted line, make sure your family takes these points into consideration:

Total Cost
The roadways are filled with signs that say it’s cheaper to buy than rent. However, there is a large gray area to consider when looking at the true costs. When you rent a home, there is a security deposit and if you own pets, a pet deposit. That is added to the monthly rent and for your peace of mind the cost of renter’s insurance. To help set your family’s monthly and yearly budget, you should always add in the cost of your utilities, even if some are included in your rent. This number will give your family a pretty accurate glimpse at what renting will cost you.

On the other hand, buying has an even longer list of numbers that need to be taken into consideration. To start with, there is no maintenance crew to maintain the landscaping or fix unexpected leaks. This means your family will have to set aside an amount for the tools to take care of these mundane tasks or to hire professionals to take care of these for you. Although there are no damage or security deposits, you will be required to make a considerable down payment determined by your mortgage lender. In addition, you will have to pay inspection fees, closing costs, annual property taxes, your monthly mortgage payment, and the cost of your utilities.

Location
The cost of living is going to be greater in certain areas, particularly new, trendy, or higher socioeconomic ones. This is going to affect the amount of rent landlords charge as well as housing prices. If you want to live in one of the ‘in’ neighborhoods, your family may have greater luck finding a place to rent that won’t completely break the bank. This will give you the opportunity to look without feeling pressured and allow you to put money away in savings to buy your dream home when you find it.

Occupation
Many young people feel pressured to buy a home and start a family right out of college. However, the job market has shifted tremendously in the last ten years, and job security, flexibility, and stability is not what it used to be. People feel like they can move with their job or to find a job if they are renting a home. However, people that buy a home often feel they as if they are stuck in location. If your job situation does not feel stable or you prefer the freedom to move with your company, renting a home may be preferable for your family.

Credit Rating
Every time you turn on the TV, there is a commercial about credit ratings. From the time you get a social security number, you are building a credit rating. Bills that are early or paid on time boost your rating, while those that are delinquent have the opposite effect. No matter what anyone tells you, if your rating is less than good or around 660, the amount you have to pay for deposits, down payments, and your monthly mortgage will all be greater than if your rating is higher.

If you are in the market for a new home but you have a poor score, it may be better for your family to rent while you attempt to clean up your credit score. This means taking active measures to contact the credit bureaus, the places you owe, or the collection agencies. However, every point you raise your score can have a tremendous effect on the amount you pay to buy your home in the long run.

When it comes right down to it, only you know your family’s budget and whether renting or buying a new home will be the right fit for the moment. For more information on renting, buying, or selling your home, contact us at info@bluehenhomebuyers.com.

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