Rent Or Buy
Are you looking to rent a home or buy a home? Both of these options should be considered carefully. Either one could make a big difference in how you are currently living, and could also make a huge impact on how you live in the future. There are several factors to consider when making the decision to rent or buy.
The worst thing about renting vs buying is that when you rent, you are just throwing money away. Of course you need somewhere to live, but renters often have a hard time building wealth because they are helping to build someone else’s real estate wealth rather than their own.
So why rent? Renting is convenient. Call the landlord to come fix things. Pay rent. That’s about it. Many of the hassles of home ownership fall on the landlord’s back and you don’t have to deal with it. But what if you want to buy a home, you’ll need to get to work.
First, consider your finances. If you are living paycheck-to-paycheck and are not very good at saving, you’re probably only set up to rent. You may never buy a house if you lack the ability to save. Scraping enough money together for the down payment can be quite a daunting challenge if you are not a natural saver.
Plan way in advance if that is the case since it could take years to save up enough for an adequate down payment. Banks often require ten percent or more of the price of the home as a down payment.
If have decent credit and an appropriate amount of money, then getting a home loan should not pose any difficulty for you. If your credit is not in great shape, you can usually still get the loan, but it could come at a higher interest rate. if you have a home loan foreclosure on your record, it may be very difficult to get a loan until you clean up your credit and improve your credit score.
Rent To Buy
One handy strategy to consider is rent to buy homes. If the homes you are looking at are out of your price range for purchase, then offer to rent the home from the seller with an option to purchase it in a specified amount of time. If they don’t need a lot of cash up front, they may agree to this.
In this way, your rent money can be applied to the purchase price of the home and you won’t be wasting your rent money any more! You should always leave yourself an out if you rent to buy property.
If you are not prepared to buy the house after the specified amount of time, or you are unable to fulfill the contract for any reason, you’ll want a clause in the contract allowing you out of it. Of course, any funds you had applied towards the purchase price would be forfeit.
A rent to own strategy works for many people that want to get into a house but don’t have the necessary funds to purchase outright. If you are struggling with the rent or buy question, this may be your answer.