Today, renters throughout the nation are mostly facing the same problem, and that is, high monthly rentals and household costs. These expenses are rising month after month without any break. In fact, in an average, renters are paying almost 30% of their monthly income towards rent and other miscellaneous household expenses. On the other hand, homeowners usually pay more or less 15% towards mortgages. Renters may find home buying much appealing due to the steep cost of rent, but many of them can’t gather enough funds after paying their rent charges to save for 20% down payment. So, what should renters do if they have to face the choices between keep paying high rents or save finances to buy a home?
So, let's do some research on the best choice between renting apartments and buying homes:
Situation 1. You want your kids to live near a good school and there are no decent rental options
As a renter, you may find various rental options in downtown areas, but sometimes, those areas don’t have higher rated education facility or schools. If you don’t want to neglect your kid’s education, you might want to get rental apartments in good school areas or districts. Schools in surrounding districts or bay areas have greater education facilities with proper transportation than downtown area schools. So, most of the parents would choose to live in the bay, suburb, and industrial blocks if they’re given the choice to buy a home there.
Situation 2. You're going to live in the same place for a long time
Some external financial reasons like closing costs, realtors’ commissions, loan origination fees, and several more may create obstacles for you to move from one place to another locality. Some internal reasons like parents health check up, jobs of few family members in local places like stores, hotels may also influence your decision to buy a home for staying long.
Situation 3. A better job in a your desired location isn’t available yet
People always look for a better job with a higher income than what they are getting right now. If you are quite confident that you’re not getting a handsome-salaried job, better than the current one for at least next 4 to 5 years, you’ll sure decide to buy a new home in your current location being a renter.
Situation 4. You can get a 15-year mortgage
If you’re eligible for a 15-year mortgage, you might have gone to a new home in the first place. Practically, anybody would want to pay off the mortgage as quickly as possible. So, accepting the offer of a 15-year mortgage is quite interesting for any renter who is looking to buy a new home. , and the monthly payment will be consists of the major part of your principal loan amount and low-interest.
Situation 5. You can put at least 20% down, and pay for the house in cash
While buying a new home, the biggest challenge we face as a renter is to arrange a down payment and paying monthly rental. But, there are some low and no down payment home loan programs that can ease up the monetary burden on our shoulders.
Many pieces of advice will highlight the fact that it is the be best way to put down 20% on a new home. A down payment can help you to lower your monthly payments. It can create more flexibility to become a money-saver. Renters normally don’t save that much amount to support downpayment until they become homeowners. Buying today, even with depositing a small down payment, can help you to accelerate savings, build equity, and grow your wealth.
, , . It will sometimes become essential for qualifying, and you never know when you may require that money.
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