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Quick Guide: Renting vs. Buying


Are you thinking moving and not sure which route to take? To rent or own?

There are a few things to consider when trying to decide what works best for you and your family…

Are you financially ready?

If you’re buying, you’ll need a down payment to pay upfront that will fund the equity in the property that proves to lenders you’ve got skin in the homeowner game. The amount you’ll need varies, but the standard preferred amount is 20% and that often gets you the best rates.

When renting – in most cases – there’s no need for a hefty down payment. You may have to come up with a deposit, but it’s generally a lot less than the 20% usually required for buying.

Are you ready for monthly mortgage payments?

If you’re buying, this is the amount you’ll pay each month, which in most cases includes principal, interest (both of which are…

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  1. I put these comments on the original post, but I want to repeat them here, with a couple of additional items:

    There are quite a few additional considerations about buying versus renting:

    (1) Don’t think of buying as an investment. You can lose money on buying a house as easily as you can lose money playing the stock market.

    (2) Property taxes can add a substantial amount to the monthly payment. In my community, they add 40% to the monthly payment, making buying much more expensive than renting.

    (3) How old is the home. What kind of war chest do you need for maintenance and repairs? When renting, the landlord picks up those costs.

    (4) How long are you going to live there? If there’s a chance you will move in less than four years, buying makes no sense.

    (5) 20% down is an obsolete standard. You want to work with a mortgage broker, not a bank, to get the best possible mortgage for you.

    (6) If you are planning to buy a home at any point, you want to review your life insurance. The earlier you buy life insurance, the cheaper it is, and you don’t want to leave a loved one with a mortgage they can’t pay.

  2. Like this blog. While I live in a house now that’s owned by my landlady an her mother , I have noticed what they go through with a house . No thank you , I’ll always be a renter, I’m sorry . Too many hassles with a house .

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