Renting Vs. Buying
5 Questions to Ask Yourself, When temperatures , it can be hard to think about anything other than staying warm.
But if you've got a snow day, take a few hours to get your financial life in order. Answer these five questions and you'll be ready to make major decisions by the time the spring thaw comes.
Are you ready for homeownership? The decision to rent or buy is a personal one that depends on your financial situation, future plans and lifestyle. Buying may make sense if you plan to stay in your home for at least five to seven years and you're interested in building long–term equity.
How's your credit? A decent credit score is important whether you're renting or buying. Landlords and lenders look at your credit score to decide whether you're likely to pay on time. Generally, the better your score, the lower your mortgage interest rate is likely to be. That means a good credit score saves you money in the long run.
How much can you afford? Fully understanding your finances is critical. It will not only help you determine your price limit, but it will also help you understand if your budget can cover a major repair such as a new roof or furnace if you choose to buy.
Do you have enough saved for a security deposit or down payment? If you've decided to rent, you'll probably need to put down a security deposit and pay one or two months of rent up front. That's a total of four months of rent in advance.
After considering your answers to these questions, are you ready to buy a home? If so, the first step is to research lenders and find one that you're comfortable with. Don't have a lender in mine contact you local Real Estate Agent for referral, they can also answer some of your questions as to what to ask the lender.
Then, before you begin house hunting, it's a good idea to get pre–approved for a mortgage. This will allow you to negotiate with confidence – and close the deal faster so you can make your dream of homeownership a reality.
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