With interest rates and prices at their lowest levels in years, it is tempting to consider buying a house. But deciding whether to buy or rent can be complicated, and potential homebuyers have a lot to consider this summer. Here are some key questions to help you make wise financial choices when considering buying a home.
How much can you afford to put down? Can you afford the monthly payment?
A mortgage down payment of 5 to 20% of the selling price is typical. The size of the down payment will impact the monthly cost. Assess your financial health and consider if you can then afford the monthly cost.
What other debt do you have?
Consider all of your current and expected financial obligations and ensure you are able to make all the payments. You monthly bills, including a mortgage payment should be less than 35 to 40% of your monthly income. If you can’t keep payments below that, you may be better off renting.
What is my credit score? Can I qualify for a good interest rate?
A high credit score qualifies you for better interest rates on a mortgage. If your credit score is low, you may want to rent and take steps to raise your score. Our apartments in Richmond, VA reports on-time rent payments to Equifax. Renting at The Gardens at Twin Hickory or from any HHHunt apartment home can raise your credit score.
How much will taxes, monthly maintenance or other fees cost?
Owning a home means you will have to pay real estate taxes and other costs like insurance and maintenance. Remember to factor in these costs. Renters have no additional monthly costs beyond rental payments.
How many years will I stay here?
Generally, if you are not going to stay in one city for at least 7 years, it makes sense to rent. Renters have greater flexibility to move.