You’ve made the exciting decision to move to a new home. But, do you rent or buy? This is a question many people face. Depending on your current circumstance, each can have its own pros and cons. If you buy a home there is also the option of working with a new home builder. Then, you have the ability to design and build the perfect home for you and your family. Ultimately, the decision rests on several variables that should all be considered – factors that include your budget, future plans and goals, and the current real estate market.
Many young people at the beginning of their independent lives are hesitant about the upfront costs of buying a home as well as not having the flexibility that renting offers. Many people who are further in their careers and have started a family are looking for the long term stability and equity that building or buying a home can offer. On the other end of the spectrum, those who are nearing retirement are often looking for the flexibility that downsizing and renting a smaller home or condo can offer. Regardless of the big-picture factors that affect homeownership rates, deciding whether to purchase a home or rent is a very personal choice that requires careful and informed consideration.
Let’s take a look at some of the benefits and drawbacks of both buying a home and renting a home. Evaluating the pros and cons of both can help you confidently make an informed decision that will be beneficial for you and your family in the long run.
Advantages Of Buying A Home
Even after the initial upfront costs of buying a home are considered, this can be a very wise and profitable decision in the long run for many people.
Trying to decide whether building a new home or buying an existing house is a good “problem” to have, since either one is a path to the advantages of homeownership. There are pros and cons to each, of course, and your individual circumstances are factors in your decision as well. (There’s even a hybrid choice: Buying a brand-new home that’s already been built by a custom home builder!) Since buying any type of home is likely to be the single largest financial transaction you may ever make, it’s worth the time to research your options and know what to consider before putting money down on your next address.
What to know about building a new house.
Building a house is exciting, challenging, and everything in between. Here are a few things to think about if you’ve never had a brand-new home built before:
- Your home can include all of the features you want and none that you don’t, so it can reflect your taste right down to the last detail.
- You probably won’t have to deal with any expensive repairs during the first few years. As Forbes notes in its article, Is Building A New House Realistic?, “No immediate repairs will be needed once you move into the house. It’s obvious that an older home will require more maintenance. You won’t have this type of issue with a brand new home.”
- You can choose to use the latest, most energy-efficient systems, appliances and materials, which can save you money over the life of the home.
- Your home will be built in accordance with up-to-date building codes, which can make it safer and stronger.
- You won’t have to put any sweat equity into knocking down walls or tearing out flooring that doesn’t suit your taste or needs.
If you’ve considered becoming a first-time homeowner or building your first home but aren’t sure it’s right for you—or don’t know where to begin—think about making 2019 the year you start on the path to homeownership. The information below can help you make a New Year’s resolution that you’ll want to stick to!
The Basic Steps to Buying a House
While your individual circumstances, financial situation and the type of property you’re buying will all factor into your personal home-buying plan and experience, these are the foundational steps toward owning your own home.
Step 1: Research homes on the market
If you’ve been dreaming of owning a home, you probably already have certain styles and neighborhoods in mind. It’s important to look beyond a home’s curb appeal or the photos on listings, though, so that you can be a smarter home shopper. Go deeper on the information provided on listings to find out how long a home has been on the market and how much the price may have dropped since it was first listed, and research what other similar homes nearby recently sold for. All of this will give you a better idea of whether asking prices are fair or realistic.
Step 2: Find out what you can afford
There are several online calculators that can help you determine a home-buying budget, but only use these for a general idea. To arrive at the most accurate number, take the time to meet with lenders who can guide you through the process to become prequalified or preapproved for a mortgage loan. You won’t need to fill out lengthy loan applications just yet, but you will need to provide enough information about your finances so that the lender can give you the numbers you need to be ready to make an offer when the right home comes along.