Maybe it’s not quite as trendy as athleisure or Millennial pink, but the question of renting versus buying a home seems to be a common one that many Americans are considering. If you’re wondering whether the time is right to buy a home — or if you’re taking stock of what you might need to do to get things in order so that the timing feels more ideal — here are a few things to think about:
Run The Numbers
Let’s break this down: It’s important to understand exactly what you’re paying for as a renter, and what you might gain or lose if you were to buy a home instead. If you rent, you won’t maintain the costs of owning a home (like costly repairs if and when things break or malfunction). But you also won’t build any equity as a renter. Consider making a pros and cons list that takes everything from landlord-provided maintenance to HOA fees into account, and consult the Rent vs. Buy Calculator to crunch some more specific numbers.
Consider The Benefits
There are definitely some perks of owning a home, including the fact that you’ll build home equity. If you rent, any money that you pay is essentially gone — it’s your landlord’s income as soon as it leaves your bank account. When you own a home, you’ll build equity that you could potentially leverage down the road to cover things like home improvements or paying down non-mortgage debt.
Consider The Costs
While there are benefits to owning a home, there are also costs associated with becoming a homeowner. Some things to think about before buying a home include:
- The actual purchase-related costs, like a down payment, closing costs, homeowners insurance, etc. Homeowners also have to pay property taxes, which can vary in cost depending on the market where you buy.
- The fact that you’re the one on the hook for repairs as a homeowner. Any and every time something goes wrong or breaks, you the homeowner will be responsible for handling it, getting estimates from contractors or repair services, and paying for the associated costs.
Homeownership makes sense for a lot of people, though everyone’s unique financial situation is different. If you weigh the various pros and cons of homeownership and decide to buy a home, Mr. Cooper is here to help. Get in touch with one of our pros today to begin your homeownership journey!