March 09, 2021 at 12:20pm | Team LGI
There are differing opinions when it comes to buying a home or renting. Some will say that buying is a sound investment, while others say that your money can be spent elsewhere. How do you decide what is best for you? Use this guide to help you see when you are ready to buy.

You Found the Perfect Neighborhood

Renting is best for those who plan on living in an area for only a few years. When you are ready to move, ending your lease is much easier than selling a home. However, if you plan to stay around for a longer time, you may be ready to purchase a home. Do your research on the area first. If you have children, what are their school options? How is the commute to work and other places of interest? If you are happy with the answers, you can move forward with the buying process.

You Cannot Rent Similar Homes for a Lower Price

One of the reasons that people stick with renting is because it costs less than a mortgage and other house costs. However, you may live in an area where rent prices are steadily increasing. Look up the type of home you would like to buy and get a general idea of the monthly costs. Then, look at a similar home that is up for rent. If the monthly rates are close, then you are not saving that much money by renting.

You Have Enough Money for a Down Payment

Many people are scared off from buying a home because of the required down payment. Suggestions say that you should have at least 20 percent saved for a down payment. If you have less, you will need to pay private mortgage insurance, which adds to your annual costs. The more money you add to the down payment, the better because your monthly expenses will be lower. Check out your savings and see if you are ready to spend a significant amount of money.

You Have a Steady Employment History

When applying for a loan, mortgage companies will look at your employment history. When these companies give out significant loans, they want to trust their borrowers. They like to see applicants that have stayed with the same company for at least two years. This information tells them that you will have the funds to pay off your mortgage.

You Are Prepared for Emergencies

As a renter, your landlord covers any unexpected repairs, such as a broken sink or faulty wiring. When you purchase a home, all of that responsibility, and cost, falls on you. If you want to buy a home, you should consider creating an emergency fund for those random events. If you are handy with tools, you may be able to fix some of the problems yourself. Look at your monthly expenses and see if you can set aside some money for repairs.

In Conclusion

This guide is not a checklist for buying a home. You may fit all of the criteria above and still not want to buy. Purchasing a home is one of the biggest decisions you can make, so it is good to take time to think about it. If you feel like you want to buy a house, look to see if you are prepared to take the next steps.
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