Should You Get a Home Mortgage, Or Should You Rent?
View PDF | Print View
by: marciafreeman
Total views: 46
Word Count: 552
If you currently rent your house or apartment, you may be looking at the low, low rates available for a home mortgage in June 2009 and wondering whether its time to buy a house. You may even have done the math with a rent vs. owning calculator and worked out that your home mortgage will come to less than your monthly rent. But does that mean its truly time for you to start going to open houses? Take these factors into consideration before you decide.
* Who is responsible for paying for repairs? If the roof of your rented apartment springs a leak, fixing it is the landlords responsibility. If your own houses roof springs a leak, you are the one responsible for fixing it, and you may need to shell out tens of thousands of dollars to do the job right. Will you have extra money set aside for large repairs and necessary upkeep, or will your money be taken up with paying the home mortgage?
* Who is responsible for the taxes? When you rent, your landlord pays the tax for you. However, if you own your house, you are the one stuck with the bill. Property taxes frequently run into thousands of dollars a year for relatively modest homes. Basic renovations like removing worn out carpets can jack up the appraised value of your house and add thousands of dollars more in taxes with little warning. Can you afford it?
* How large will the utility bills be? When you own a house, you are likely to face higher utility bills for two reasons. One, you are likely to buy a larger house than your previous rental, and you may be making the leap from an apartment to a house. A larger house means higher heat and air conditioning bills. Two, in many areas, landlords are required to pay certain utilities for their tenants, but homeowners must pay the bills themselves. For example, in Massachusetts, landlords pay water and sewer bills for their tenants. In practice, the money comes out of the rent and the tenants are charged slightly more to cover it, but this cost is invisible to tenants, so people who rent may forget to take these utility bills into account when they estimate how much they pay for utilities. If your utility bill rises when you own your home, will you be able to afford the extra cost?
And, last but not least:
* Whom does your money benefit? When you pay rent, all of your rent money goes to the landlord. If you buy a house, the interest goes to the home mortgage lender, but the capital goes back into your pocket. You may even make a tidy profit if your house gains in value.
If the extra costs of buying a house are affordable, then taking out a home mortgage and joining the ranks of the homeowners is a good choice. However, make a full accounting of all the hidden costs first. There are things that home mortgage calculators wont tell you. Make sure you know the actual cost of a home mortgage before you leap at the chance to get a low interest rate.
About the Author
Learn the real scoop on mortgage refinancing, read a cool site.
Rating: Not yet rated