Pros And Cons Of Renting Vs. Buying

Tiffany Phillips

English 1213

Prof. Olson

29 September 14

Renting Vs. Buying Most people will struggle with some of life’s biggest decisions and challenges. Deciding whether to plant your feet firmly and purchase your own home or be free and flexible and rent will be one of them. However finances, family, stability also play a huge part in our journey to independence and financial freedom. Unfortunately in this economy some may never be fortunate enough to be able to purchase a home. Nonetheless, rented or owned its how you make it a home that counts. Some of the pros to buying and renting are if you buy you don’t have to deal with a landlord breathing down your neck. However, if you rent then when something needs repaired you yourself do

Where with renting you throw your money away every month with no stability or equity in your home. Buying a home has a lot more upfront costs according to Michele Lerner author of Renting Vs. Buying a house-How to make a decision pros and cons. “To start, you need cash for an earnest money deposit when you make an offer on a home, usually anywhere from $500 to $1,000, or as much as 5% of the sales price. You also need to make a down payment of at least 3.5% of the home price with an FHA Insured Mortgage Loan, or 5% to 20% with a conventional loan. On a $100,000 home, this will be at least $3,500. In addition to your down payment, you have to pay closing costs – usually 2% to 5% of the home price depending on your local real estate market. Other costs of homeownership include Moving Costs, paying for inspections (such as a home inspection and a termite inspection), repairing or replacing appliances if necessary, and Furnishing your new home. It’s essential that you consider all these costs within the context of the cash you have available to you. The last thing you want, for example, is to live in an unfurnished home or one in need of repair or remodeling. Because you spent everything you had funding the home purchase”

“Lewis has a 3 test step process that should should ask yourself 1. The Affordability Test-Can you really afford the Loan Payments? Truly take time to look at your finances and how they will evolve for this major life decision. 2. The Quick Exit Test- Can you afford to make a sizeable down payment to make for a quick exit from the home loan if need be or desired? Make sure that if you decide to flip a house you purchase that you can afford to exit quickly it can get pricey. 3. The Duh Test- Do you honestly know what you’re getting into? You need to make sure you understand your mortgage most people do not understand their mortagages.seek assistance from a real-estate lawyer or a non-profit housing counselor someone who will not profit from your