Saturday, October 19, 2013

Why to Buy VS Rent


Easier mortgage processes, 
positive attitudes inspire renters 
to buy


Owning a home has been an integral element of the American 
Dream for generations. But is ownership right for you? And if it 
is, how do you know if it’s the right time in your life to purchase 
a home?

Thirty-two percent of American households are renters, according 
to the National Multi Housing Council. Generally, more people 
younger than 30 occupy rentals, while the percentage of people 
who own their home increases with age, NMHC statistics indicate. 
People decide to buy a home for many reasons, but the recent 
real estate market downturn caused many Americans to rethink 
their assumptions about renting and owning.

Even with many real estate experts predicting the market will 
continue to improve, it pays to carefully evaluate how home 
ownership does - or doesn’t - figure into your long-term financial 
goals. 


If you’ve been renting and wondering if it’s time to apply 
for a mortgage and buy your own home, consider these points:

1. Renting isn’t always the cheaper option, and comparing your 
monthly rent payment directly to a mortgage payment won’t give 
you a clear picture of the financial impact of either option. Online 
calculators, like Guaranteed Rate’s rent vs. buy online calculator, 
can give you a better understanding of the comparison. With 
mortgage rates consistently low and rental markets competitive 
across the country, real estate experts agree that in most major 
metropolitan areas it will still be cheaper in the long run to buy than 
continue to rent.

2. While the days of zero-money-down mortgages are essentially
over, it’s a misconception that you need a huge amount of money
to buy a house. Yes, you’ll almost certainly need a down payment,
but different lenders will require different percentages. Research
your mortgage options before you begin house hunting so you’ll
know how much you’ll need to save in order to secure a mortgage
- and the home of your dreams.

3. Although the mortgage application process is detailed, it
doesn’t have to be drawn out and tedious. Many lenders now
allow you to initiate the process online, and Guaranteed Rate
has recently overhauled its website to allow borrowers to apply
for a loan, track the approval process and receive their home
loans all online. The eighth-largest retail mortgage company in
the U.S. allows customers to choose and customize their loans,
submit an application and receive an official approval letter all at
www.guaranteedrate.com. Automating the application process
compresses the traditional time frame from days - sometimes,
even weeks - into minutes. As part of the process, applicants also
receive the credit reports from all three major credit bureaus.

4. Buying a home affords you the opportunity to really grow your
roots, but the flipside is that in order to get the most out of your
investment, you need to stay put for a while. If you anticipate
being in your current job and living in your current town for at
least five years, the long-term investment of buying a house will
make more sense for you. If you anticipate a job change or a
move within a few years, you may want to hold off on buying a
house. The good news is, doing so gives you more time to save
toward a down payment so you’ll look even more appealing to
lenders when you are ready to buy.

While only you can decide if homeownership is right for you and
your family - and if now is the right time to buy - keep in mind
a few statistics from Trulia.com: 42 percent of renters say they
regret not having bought a home, and 31 percent say they want
to buy a home in the next two years.

Article provided by Brandpoint - formerly ARAcontent.
Reprinted with permission.

Courtesy of Jamie Cook, First American Home Warranty

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