Renting Verses Buying: Signs You’re Ready to Buy Your First Home
There are many benefits of homeownership, but many don’t know when they’ll be ready to make the change from renting to buying and exactly what advantages come with purchasing a home. Making the change from renting to owning can feel overwhelming, but there are many exciting benefits to owning your own home! Let’s discuss some key signs you’re ready to jump in.
Even though there are costs associated buying a home, owning will actually save you money over time, make it easier to budget consistently if you choose a fixed rate mortgage, and help improve your credit by demonstrating your history as a responsible borrower.
Owning a home gives you the opportunity to set monthly payments without risk of increasing over time, whereas your rent amount if leasing can increase if you choose to renew after your lease is up. Owning a home gives you the opportunity to build equity. In real estate, equity is the probable market value of a home minus any liens against the property, for example, the mortgage.
A portion of your monthly payments is tax deductible as well. In the first few years of your mortgage, your monthly payment is almost all interest meaning you can get a fairly good deduction come tax time.
Another benefit to owning over renting is having the freedom to design and update your home where you see fit. Not all rentals allow changing wall colors or installing different appliances. When you own your own place, you can customize your home as you wish.
When considering whether to make the switch from renting to buying, ask yourself the following questions:
- Is your income somewhat stable?
- Do you know what your credit score is?
- Are you and your family committed to living in the same place for the next few years?
- Do you have money set aside for unexpected costs, such as home repairs?
- Are you planning on making any significant life changes in the next few years?
Budgeting efficiently and setting money aside for down payment and closing costs is a smart first step to the home buying process. Keeping some extra funds aside for unexpected emergency costs is always a plus too. If you can answer the above questions with ease, it might show signs you’re ready to make the switch from renting to owning your own home.
Your income plays a big role in determining the mortgage amount you can be pre-approved for, and you want to be sure that you are comfortable with the mortgage payment for the entire time you will own the home, regardless of what life changes may occur.
If you have any questions about the process or what you might qualify for, reach out to an expert at Acadia Lending Group! There is no obligation and is completely risk free. Knowing what you qualify for and how to improve until you are fully ready to buy is the best way to go about it. Our loan officers are ready to help!