Buying a house or an apartment is everyone’s dream, but it can be tough deciding whether to rent a home or buy a home. Can you really be a home-owner keeping in mind the inherent costs? It can be a monetary nightmare to turn ones dream into reality.
Buying a home is definitely the best investment, and it can feel like a great achievement – though it can also a financial pain. Be sure to do thorough background research into your specific property and the costs involved, and consider all the necessary information when deciding whether the end result will justify the expense.
You need to be aware of the true cost to the buyer of a property before rushing headlong into a contract. Do not be tempted even by very low interest rates if you have to sell all you own to raise the capital, and will have trouble making the monthly repayments.
Making no payments, or small payments, will over time steadily increase the total amount you will need to pay for your home, often far exceeding its market value. Therefore buying a house is not a matter of simply taking out a mortgage but also making sure that you will have enough money to cover your monthly payments and other related home ownership costs. Bear in mind such extras as property tax, insurance, mortgage insurance and of course maintenance of your new home.
Buying a property can win over renting if you:
- Are psychologically ready Ð property ownership means handling whatsoever comes up, be it noisy neighbours to blocked plumbing.
- Have additional funds – be prepared for extra, unforeseen costs such as unexpected repairs. You may have to forego the luxury lifestyle.
- Manage your money well – budgeting is very important if you want to avoid financial difficulties while repaying home loans. You will need to curb all unnecessary expenses before buying a home.
Renting a house or apartment on the other hand can be a great short-term solution – while saving for a deposit, while looking for a house to buy after moving to a new area, or if you are only living in a particular place for a short time. However, when you think of rent as money that could be put towards a mortgage, it makes home-ownership seem all the more tempting…
Perhaps all those risks and costs inherent in buying a home are not so terrible after all?