Choosing a place to live in is exciting and stressful. You want to move out of your parent’s house, or you’ve recently moved to a new city, and you don’t know which to do: buy or rent a home? Both options are right for different people as it depends on many factors. It’s an important choice and a difficult one to make, and we’re here to help. Here are seven things to consider before you decide between buying or renting a house.
1. Know If You Qualify For Mortgage
A mortgage is a loan you take from the bank or moneylenders, which you have to pay as monthly installments with an interest rate. A bank would need to look at your income to decide if you qualify for a mortgage.
Your gross income (Gross Debt Service) has to cover housing costs, including mortgage payments, taxes, utilities, and, if applicable, 50% of the property’s condo fees with a ratio of 35%, as of 1st of July 2020.
Your total income (Total Debt Service) has to cover debt-related payment mortgage loans, credit card payments, car loans, heating costs, and, if applicable, 50% of the property’s condo fees with a ratio of 42% as of 1st of July 2020.
According to the team at Edmonton Real Estate Pro, this means the home buyer’s affordability decreased by 11%. You can use mortgage calculators online to find out if you qualify for a mortgage. If you don’t qualify for a mortgage and you can’t afford the house, then you always have the option to rent.
2. Are You Already In Debt?
If you’re in high debt, it will not be a good idea to loan a mortgage and add to the debt. With all the known and unexpected costs it takes to maintain a house, you might find yourself very short on money. Paying rent might be expensive in some areas, but the landlord pays for maintenance and other costs, and if you can’t pay rent one month, you can always downgrade.
3. Think Of Where Your Want To Live
Your decision to live in an area depends on many things like where your work is, where your family or partner lives, or where you feel is an excellent area to live in. That being said, most areas are more expensive in rent than in the mortgage. If that’s the case you might want to go for buying if you have the option.
4. Think About Your Lifestyle
Thinking about your lifestyle is another way to help you decide whether to buy or rent a house. Do you travel a lot? If so, it’s better to rent a house than spend a lot of money for the down payment of buying a house. Do you like the flexibility of renting and the choice to change the place or do you prefer the stability of living in one house?
5. Think Of How Long You Will Stay
If you plan to stay for a long time, you have the option to buy a house. If you plan on moving out after a while, then there’s no use in going through the whole process of buying. If you plan to stay for less than 5 years, it’s simply not the best idea to invest in the place.
6. Think About The Responsibility
Owning a house is a big responsibility, you have to take care of it and maintain it. Can you afford to do that? Can you keep some money on the side for emergencies like a broken door or a hole in the wall? If you think being an owner is something you’re not prepared for, you can always rent for now.
7. Think In The Long Run
When it comes to it, after the financial considerations, you need to think of the whole situation in the long run. Is that place your dream house or do you prefer to save up for somewhere better? Is it a good investment to buy a house right now? Do you have to save up for something else like a wedding, for an instance?
Research shows that if you can afford a house, it’s better to own than to rent, and it saves more money in the long run. It feels good knowing that one day your mortgage payment will make the house yours and not go down the drain like rent. However, if you fail to pay for the mortgage, you may need to sell the house to pay off your debt.
You need to make a wise decision on whether to buy or rent a house. There’s no verdict of which is the best option. You have to assess your financial situation, lifestyle, and whether you can take on the responsibility of either. At the end of the day, both have their ups and downs, you just have to find what’s suitable for you.
If you are interested in even more lifestyle-related articles and information from us here at Bit Rebels, then we have a lot to choose from.