You don't need to be a real estate agent to know that the housing market leaves much to be desired. The early 2000's experienced a housing bubble that in my honest opinion still exists to a certain degree. A majority of homes are worth thousands of dollars less than what they were paid for so potential homeowners are already upside down before they even make their first payment. So the best option would be to rent right?
Renting would be the best temporary option in the hunt for purchasing a home but also has major disadvantages as well. Let's look at the pros and cons of both buying and renting property.
Pro Rent
This would be the best option for those....
1. Who are trying to build their credit.
For those individuals or couples who do not have a credit history and need to build their credit this may be a good option. Making rent or maintenance payments on time every month will eventually open that proverbial door to successful home ownership. Once banks see that you are capable of making these payments religiously then they are more likely to approve you for a home loan.
2. People who are always on the move.
If you are not the kind of person that settles down for an extended amount of time then renting is definitely something to consider.
3. Persons if switching jobs becomes the norm rather than the exception.
Banks like to see steady employment history when considering giving a loan so if you are a job hopper I would opt for renting until you find a job that has staying power.
4. Whose income is too small and if their pockets are even smaller.
Banks also consider your debt to income ratio which is basically the amount of money you owe your creditors vs. your income. If there is too much of a discrepancy then banks generally look the other way. Working on this with the help of a credit counseling agency or financial advisor will put you on the path to a favorable credit rating and a better chance of home ownership.
5. Who think a house is just too much home.
Owning a home requires a lot of responsibility and financial stamina. Some people are not ready for that level of commitment and they just want something simple to call home.
Pro Buying
This would be the best option for those....
6.Who are in it for the long haul.
If you made up your mind to take the plunge into home ownership then you should be prepared for all the financial and physical responsibility without thinking about reconsidering.
7. Who have good credit and even better financial habits.
Again banks consider people with these attributes the cream of the crop. In many cases the bank will even offer a low interest rate or even lower monthly payment on mortgage.
8. Who do not have many creditors.
Debt can be a good thing if used sparingly. The less people you owe, the better chance a bank will see you as a valuable asset. This will also get you better deals on payments and mortgage amounts.
9. If you are able to come up with a sizable down payment.
Coming up with at least 20% down payment will reduce the overall cost of what you will need to pay for the home. There are also several government programs available to assist with a down payment.
