Now more than ever before, housing affordability is a huge issue. Working out whether to join the homeowner’s club or continue renting can be a daunting decision. We’ll talk briefly about the pros and cons of renting and then discuss what you need to consider before making the choice to purchase a home.

Renting – The Good, The Bad, & The Ugly

Being a tenant has its benefits. For one thing, there is much cheaper upfront costs (first, last, deposit) and deposits may be returned (if you return the unit in the same condition it was rented to you in). You can avoid unpleasant and potentially costly surprises (like an appliance that breaks or cracks in the ceiling). You lock in a monthly rent and your landlord takes care of most things (maintenance, building repairs, landscaping, etc.). Lastly, you can easily move when your lease is up.

Sure, renting can be great. But there is a downside too. Your rent could be MORE expensive than a mortgage. In most rentals, you can’t make any upgrades to the unit (paint, floors, etc.) and must follow all the conditions of your lease. If you rent in an apartment, you might have loud or unruly neighbors right on top of you or below you. Most importantly, you’re not building ANY equity & wealth for yourself, you’re paying for your landlord to reap those benefits.

Buying a Home

For many, buying a home is truly the American dream and it will be one of the biggest financial commitments you’ll make in your life. You’ll want to go into it as prepared and knowledgeable as possible. Before buying a house, you MUST have these things:

• A steady, stable income
• A good credit score
• A manageable amount of debt
• A reasonable down payment
• Savings for home repairs (unless it’s fully upgraded or new construction)

Bad Credit or Banks Have Told You No?

There are a lot of potential Buyers out there who have bad credit but still can afford to be a home buyer. That’s where we come in. Logical Choice Realty Group specializes in helping Sellers sell a house without all the high commissions and fees. We also get Buyers into a home through our special Homeowners Program regardless of their credit score or if the bank has denied them. If you’re considering home ownership and worried about your credit, contact us today!

Below are 3 questions to ask yourself when considering buying a home instead of renting.

1. Can I afford the down payment required & other fees to purchase a home?

To purchase a home, most lenders require 5% – 20% down. The higher the down payment is, the better the chances are that the seller will choose you. Keep this in mind, if you don’t come up with at least 20% down, you’ll be hit with PMI (private mortgage insurance) which is a premium that gets added to your monthly costs as a means of protecting your lender in case you default on your payments. PMI will make owning a home more expensive and cost a lot more in the long run than if you saved up for the 20% down. Another benefit to paying 20% down is that you are building your home equity faster.

You will most likely be responsible for Closing costs. This could be another 3% – 4% of your home’s value due at time of closing. These cover attorney fees, preparation fees, etc. You will want to be prepared for this when considering a home purchase.

2. Have I considered the many costs associated with homeownership?

You paid a huge down payment and closing costs, that should be it right? Nope. Owning a home doesn’t just mean paying a mortgage instead of rent. It also means paying for property taxes, property insurance, homeowner’s insurance, and being responsible for all the maintenance and repairs. You are FULLY responsible for everything inside, outside, & around your home.

3. Are home prices ridiculously inflated in the area I want to live?

Mortgage rates might be decent now but that changes constantly. Limited inventory paired with great rates has caused lots of inflation in the housing market, so a home that was worth $300,000 today might be listed for $350,000 in July. Do some research to see how high the home prices are in your target area. If you see major inflation happening, 2022 might not be the right year to buy. If that’s the case, it might make sense to wait a year and see if inventory opens, which should drive the home prices back down.

As you can see, both renting & buying have their pros and cons. You must decide what you can truly afford and what makes the most sense for you. Owning a home can be wonderful because it offers stability and a way to build equity, but you don’t want to have to starve to achieve it. Markets are constantly changing so you must keep watch for the perfect moment. Talk to us today about owning a home of your own in SW Florida – regardless of your credit. Contact us today for more info!