Ready to become a homeowner? Buying a home may be the largest purchase you’ll ever make. Before you start house hunting, it’s important to understand how owning a home could impact your finances.
Buying a home can be a smart choice for many people, but before you select a real estate agent, consider the following:
Down Payments – A down payment is what you initially pay for the house, while the rest of the payment comes from your mortgage.
Mortgage Payments – Monthly mortgage payments are not comparable to monthly rent payments. Even if the monthly payment amounts are similar, owning a home means that you’ll also be responsible for other types of fees typically covered by a landlord.
Leasing a Home – If you are only looking to stay in a home for a specific period of time, consider leasing a home through a contractual agreement with the owner. Leases are typically for six to 12 months, but can be set for any length of time specified in the agreement.
Renting vs. Buying – To determine whether renting or buying is better for your needs, consider how much you are willing to invest in a property. Renting a house involves a lease where the tenant pays rent to occupy the property, and it typically involves periodic payments. If tenants have a contractual agreement to rent over a period of time, they sign a lease. Renters are not always responsible for the maintenance and upkeep of a home, while homeowners are responsible for appliances, repairs and other utilities. The benefits of buying a home will also shift as the real estate market changes.