Buying vs. Renting – Which is the Better Option for You? Part 2

Buying a home is a huge decision that affects you both financially and emotionally!

You can rent and increase your wealth, just as you can buy a home and increase your wealth, so long as you consider your overall spending and investment choices. Before making a decision as to which makes the most sense for you, we've compiled a 2 part blog series of questions with pros and cons to consider to help you decide which will best help you accomplish your goals. 

Can you get approved for a home loan? 

Your credit score, credit history and your debt-to-income ratio, among a few other considerations, will determine whether you're approved for a mortgage and how much your interest rate will be. The higher the interest rate, the more money you'll pay over the life of your loan, so you'll want to consider a home loan when your credit is in its best shape!

Are you financially ready? 

While rental prices can make homeownership seem like the more affordable option, it is important to consider that may not be the case. When you own a home, you can expect to spend more money maintaining, beautifying and improving your home. When renting, you may have some improvement options, but they are typically restricted by leasing guidelines so these options and expenses will be minimal. Landlords will also cover the cost of repairs. Often, homes are much less expensive per square foot than apartments.

If you are considering buying a home, it is important to estimate monthly payments and find out how much home you can comfortably afford. If you are currently renting, how does this monthly payment compare to the rent you pay each month? Also take into account any HOA fees, property taxes, homeowners insurance, and other costs that may arise, as well as upfront costs such as closing costs and down payments. 

If you’re interested in obtaining a cost breakdown of a new Keystone home purchase, visit the buy now tool on our website and identify if you’re interested in a build-from-scratch home or an under construction (quick move in) home. 

Some loan types offer 100% financing, USDA and VA, but for those that don't, Conventional and FHA, you will be expected to come to closing with your down payment. 

At the end of the day, consider your options and determine which makes the most sense for you, renting or buying, as they each have their own benefits. You can build wealth in a rental community just as you can with buying a home so long as you make good investment choices and consider your overall spending. Ask yourself, will home-buying improve your life? Do you want the additional responsibility? How long do you plan to live in your home? Can you get approved for a home loan and are you financially ready? 

At Keystone, we love helping customers find comfort and happiness in home ownership. If you would like to start the process of owning your own home, contact us today!