July 21, 2021

Having a Mortgage vs. Paying Rent

Home – to buy or to rent?

This is a huge question for most people looking for a new home. One of the basic needs of a human is having a place where they can eat, sleep, and relax. A place where they are comfortable enough to do whatever they wish to and have enough freedom to lead a life as they want.

However, the question of owning a house or renting it out still persists. Who doesn’t want to own a home for the rest of their life? It feels like a burden has been lifted off your shoulders and you can now live in peace. However, buying your own home is anything but easy.

On the other hand, renting an apartment can be easy and convenient. You are paying a decided amount to your landlord each month. However, you do not own the place. You might be asked to leave any time, and then you will have to go on an apartment hunt all over again.

So, which route should you choose? Here are some factors that will help you decide.

Home Maintenance

If you own a home, it is your responsibility to pay for home maintenance and yard upkeep. You need to be familiar with the condition of the home and pay the required amount, no matter how much of a toll it takes on your pocket.

On the other hand, if you are renting out an apartment owned by someone else, you are free of this responsibility. You will have to notify your landlord and they are obligated to take care of the rest. There are no additional payments asked of you and you get to live a comfortable life for as long as your contract/agreement entails.

Financial Factor

If you plan on owning a home, you need to pay a handsome amount as a down payment. You must also have an excellent credit score and decent-looking bank statements to qualify for a mortgage. It is a huge investment that will affect not only your lifestyle but also your bank balance. However, you will be the owner of your own property. You are building equity and moving forward towards a strain-free life.

On the other hand, if you do not have the financial means to own a home, your safest option is to rent an apartment. Moreover, if you are in the middle of building your credit score, renting is the way to go. However, paying rent is like paying someone else’s mortgage. You are not building wealth for yourself and might end up in a loss in the long run.

Mortgage Prices vs. Rent Prices

The real estate industry is currently offering lower mortgage payments; almost as much as rent. Once the payment is set and after all the documentation, you will have to pay that amount for a certain period.

On the other hand, if you plan on renting a place, you will have to pay a decided amount every month. However, you cannot control it and the landlord can increase your rent at the end of the agreement. However, renting a place is relatively easier than owning a place in this market as the prices are sky-rocketing and you might end up paying more than the asking price.

There is no right or wrong answer to this question. You will have to analyze your financial and living situation and decide accordingly.