Should You Rent Or Buy Your Home?
Buying a home is likely to be the biggest financial decision you make during your life, so it’s important to get it right. This guide will aim to help you decide whether renting or buying is best for your current circumstances.
Benefits of owning
Owning your own home means you can renovate and decorate your home as you please, without needing your landlord’s approval. It also means you can have pets, let other people stay over and have parties; things you may not otherwise be allowed to do.
Buying a home provides you with certainty; there’s no risk that you’ll be displaced by a landlord on short notice.
You build equity
If you rent your home, you are essentially throwing money away every month, as you never actually own anything. However, if you buy your home, the money you pay every month will go towards paying off your mortgage, and you will build equity in your home over time.
It is an investment
House prices generally appreciate over time, build equity and provide you with a nest egg for the future.
Potential drawbacks of owning
Buying a home is a huge financial commitment which is likely to affect you for the foreseeable future. Make sure you fully understand and can afford what you’re taking on.
Buying a home can tie you down to a location, making it much more difficult to pick up and leave than if you were renting. It can sometimes be very difficult to sell your home, and the fees involved in doing so mean it isn’t something you could do regularly.
Ties up your cash
Mortgage repayments are almost always higher than the cost of rent, and the considerable deposit you will have to put down means that a large chunk of your money will be tied up in your home. This will mean that you may not have as much spare cash to spend on things such as holidays or meals out.
We mentioned earlier that your house can go up in price over time, but it could easily decrease in value too. If the value of your home falls, you may be unable to sell if you owe more to your mortgage lender than your home is worth
When you own your own home, you are responsible for paying insurance, council tax, stamp duty, as well as the obvious running costs such as gas, electricity and utilities. You also have to make sure you can afford maintenance costs like fixing a broken boiler or leaky roof.
Which is best for you?
The first step towards buying a property is working out whether you can afford it.
Here are the costs you will face when buying a home:
- Survey cost
- Stamp duty
- Removal costs
- Legal costs
- Your monthly bills – such as gas, electricity, home phone, etc.
If you don’t have the money to afford these costs right now, consider creating a savings plan to help you reach your goal.
There are also a number of government housing schemes available to aid you in buying your home if you are on a low income, a first-time buyer, a key worker, or only have small savings for a deposit.
Hopefully this has helped you to decide which option is best for you. If you have any further questions, you can get in touch with us here
Also, if you are moving home and you’re looking for a removal company, get in touch with us here for a free quote on a 5-star move!