Is It Time For You To Stop Renting And Buy A House?
With rent prices increasing, you’ve probably heard the common phrase: “stop renting, start owning.” Renting and buying both have their own benefits. Renting gives you flexibility, while buying a house is an investment that can help you build equity. If you’re trying to decide if it’s the right time for you to buy a home, there are a lot of factors that you should consider.
Ultimately, whether or not you should stop renting and start owning comes down to key factors like the amount of debt you have, how much you have saved, what your plans for the future are, and much more. We often find that renters are more ready to own a home than they may think. In fact, after reading this article, you may realize the same thing.
Arkansas Federal Mortgage can help you through the homeownership process, from getting pre-qualified to finalizing your mortgage application. Visit our website or your local branch to learn more about the variety of mortgage options available and how we can help you become a homeowner.
What’s the Difference Between Buying and Renting?
If you’re considering becoming a first-time homeowner, you might be wondering what the big deal is with buying vs. renting and why you would want to make the commitment of buying a home and having a mortgage. Depending on what’s going on in your life, there are a few reasons that buying a house might be a good idea for you.
Saving Money On Housing
One major benefit that people list when buying a house is the ability to save money. Depending on the terms of your mortgage and the specifics of your situation, your monthly mortgage payments could be lower than rent payments in your area.
Cost Control With Consistent Monthly Payments
Paying off a mortgage also offers the peace of mind of cost control. You won’t be at the mercy of your landlord raising your rent. When paying off a mortgage, your monthly mortgage payment will stay consistent throughout your mortgage if you got a fixed-rate mortgage.
Owning a home can offer a lot more privacy than living in an apartment. In a home or townhouse, you’ll have greater privacy of sharing fewer or no walls with anyone else, and you likely won’t have upstairs or downstairs neighbors.
Customization and Personalization
When you own a home, you can make it your own. You’ll be able to make any changes that you want without worrying about upsetting your landlord or being able to reverse any changes when your lease ends.
At What Point Should You Buy A Home And Stop Renting?
The right answer to “when is it time to buy” differs for everyone and every situation. If you’re trying to decide, there are a lot of things you should consider, especially if you’re a first-time homebuyer.
Low Existing Debt
A mortgage is a major financial commitment that involves taking out credit and taking a financial risk. Before you buy a home, it’s recommended that you not have any other major debt and to have a good credit score. You don’t need to be debt-free before you buy, but if you’re sweating the bills each month or just paying the minimums, you may want to get more of your other debt paid off first. Applying for a mortgage with good credit and having little to no debt is one of the best ways to qualify for a lower interest rate or a shorter mortgage. Having a lower interest rate or a shorter mortgage term means that you’ll likely pay less interest over the course of your mortgage.
Houses are expensive, and depending on the type of mortgage you qualify for, you will probably need to save up for a down payment. The larger the down payment, the less you’ll have to get for a loan, saving you money on your monthly payments.
When it comes to owning a home, it’s also important to have money saved for any emergencies that might come up too. Unlike an apartment, you’ll be the one responsible for paying to fix any issues.
Buying a home and getting a mortgage means that you will have a mortgage to pay for the length of your mortgage. Before committing to a 15 or 30-year mortgage, it’s important that you’re actively employed and have a steady source of income. This is especially important because it will impact how you qualify for your mortgage. Being able to show an employment history and steady income could help you qualify for a lower interest rate or shorter loan term.
Current Mortgage Rates
It’s important that you keep track of mortgage rates because they have a major impact on what you’ll end up paying for your mortgage. If mortgage rates are low or have recently dropped, it could be a good time to buy a home. You can stay up-to-date with mortgage rates on a variety of mortgage terms and types with our mortgage rate calculator.
If you’ve found somewhere that you know you’ll want to live for years, like a specific city or school district, buying a home might make sense. There are other factors, like mortgage rates and home prices, that you should consider, but if you’re planning to stay in a specific area for several years, buying a home can be a great investment.
Get Pre-Qualified With Arkansas Federal Mortgage
If you’re considering buying a house, the first step is getting pre-qualified. This will help you know how much of a mortgage you’re eligible to get so that you can look for houses within your budget.
Arkansas Federal offers a variety of mortgage types for first-time or returning homebuyers, with loan term options and competitive interest rates. You can learn more about your mortgage options today on our website or in person at your local Arkansas Federal branch, or apply online and lock in your mortgage rate today.