Buying a house is a huge step, a house is an asset but is it worth the trouble? Would you have been better off renting a house rather than buying one? Here some pointers to help you decide.
1. Financial Priority
You may have enough cash for a house or its down payment but you will not be left with any after that. Other things like a student loan, retirement fund and such will have to take a step back. Buying a house sets you back in financial terms. Can you afford this financial setback? If yes then you can go ahead and buy the house. If you can pay a monthly mortgage with all the other things that you have on pending then yes, you can buy the house.
2. Can You Afford Down Payment & Closing Costs?
As far as buying and renting are concerned, renting needs a bit saving as well. You will need to pay a deposit and a month rent upfront, but that’s it. But with buying your own place, you will need to pay at least 20% in down payment and the rest of the installments i.e. mortgage. Ask your self is there anything better than you should allow this money to?
3. Comparing the Prices
At times, renting seems so much better than buying, but then there are times when you have to pay more rent than monthly mortgage. At those times buying doesn’t seem a bad idea, does it? Always compare the pricing between renting and owning before making a solid decision.
4. How Long Do You Plan to Live Here?
This is the most important point of the lot if you are planning on selling the place in less than five years, than its very foolish to buy the house. As the house doesn’t pay its depreciation cost in 5 years, you will be losing money instead of earning some in-house value. If you are planning to live more than that then buying is the right choice for you.
5. Qualifying for a Decent Deal on Mortgage?
If you want to land yourself a good deal on the mortgage than you will need to have a decent income and respectable credit standing to meet the requirements for the lowest rates and best terms on mortgage loans.
6. Other Costs That You Will Be Responsible for as a Homeowner
There are other things to pay beyond down payment and mortgage. These may include:
- Homeowner’s insurance
- Property taxes
- Home maintenance costs
- Homeowners’ association fees
- Utility costs (water bills, trash collection, electricity bills)
- Junk pickup Austin service cost
Fortunately, renters don’t need to worry about these costs, their only worry is every month’s rent.
7. Is Buying a Riskier Than Renting?
You are buying a fixed asset, that’s the best thing, I guess. It should be better than renting anyway. But is it? Buying is good but when you don’t get good returns on your house than you are stuck.
Research well before taking a leap as big as buying a house. And it’s also a good idea to clean up the junk with the help of a junk pick up Austin service before leaving a house or for cleaning up the house you’re about to move in.