According to a recent news report, buying a home in a major metropolitan area is now 45% cheaper than renting. However, the experts suggest that home buyers consider these five things before they decide to buy a home.
How Long You Plan to Stay is Important
If you want to flip your home or will be making a move within a short period, you are more than likely to pay more upfront than you will net in return. Experts suggest that you plan to stay five to 10 years to recoup the costs associated with buying a home.
Make Sure to Choose a Quality Location
It’s always about location when it comes to home buying. But it affects renting as well. In some cities, the cost of renting is up, while the cost of home ownership is down. So choose wisely and keep in mind that the higher the vacancy rate, the better the deal.
Consider Hidden Costs
On the owning side, there are closing costs, getting homeowners insurance, maintenance, and upkeep. While for renters, the cost to rent is climbing. The National Association of Realtors indicates that the cost to rent is likely to increase 4% this year and next.
Tax Deductions are Not a Guarantee
While currently there are a variety of tax deductions for homeowners, some wonder how long they will be around. As Washington looks at ways to reduce the deficit, which may include making changes to the tax code, potential homeowners should not look at home ownership purely as a tax benefit.
Take a Good Look at Your Financial Situation
Although your credit score will influence your ability to buy, the going rate for a down payment on a home is 20%. If you can’t get a reasonable rate on a mortgage, it might be wiser to rent until you get your credit in order.
Wherever you live, think carefully before you decide to buy. Then once you decide, make sure to get the right homeowners insurance coverage. For those who need coverage in New York, Connecticut, or New Jersey, we’re here to help.