The Road to Home Ownership: Renting vs. Owning

buy-or-rentThere comes a time in everybody’s life when they start to wonder if they would be better off buying a house or a condo instead of renting an apartment or a house. While there are definite advantages to each option, there are certain questions that we all must ask that will help us determine whether we are ready to buy a home and put down some roots. If you are thinking about buying a new house in Dartmouth or anywhere else in Southeastern Massachusetts, this guide just might help you decide.

The Advantages of Renting

When you rent an apartment or a house, the advantages are pretty clear. If something goes wrong and you need to have work done on the roof, to the air-conditioning unit or to the plumbing, you call the landlord or management company and the work gets taken care of for you. If you own your own home, those bills are yours.

When you rent an apartment and its time to get new carpet, paint or vinyl flooring, you contact the management company and ask for an inspection of your apartment to determine whether or not the company is willing to pay to make upgrades. Again, if you own a home, those bills would be yours.

When you rent an apartment there is a set monthly rent that needs to be paid. There are no property taxes to consider and there are no worries about mowing the lawn or keeping the property up according to community standards. In some cases a house rental may require you to keep up the lawn, but in most situations, the landlord takes care of this as well. If you own a home, all of the landscaping, property taxes and additional community fees and obligations are all yours.

The Disadvantages of Renting

When you rent an apartment you pay a set monthly rent that goes on and on throughout the term of your lease. You just keep paying the monthly rate and never end up owning anything free and clear. Your landlord can also give you rent increases at the end of your lease or require you to sign a long-term lease in order to get a discounted rate. When you buy a home, eventually your home mortgage loan payments will end and the house will belong to you.

When you rent an apartment you aren’t allowed to make changes. In most cases the landlord will not allow you to paint, change the carpet or trade out the lighting fixtures. When you buy a home it all belongs to you and you can do anything you want to it – from paint to carpet, vinyl to tile, upgrades and additions, renovations and remodels – it’s all yours.

When you rent an apartment you have to abide by a set of rules. Assigned parking spaces, carports or garages may or may not be available and you might have to park out on the street. When you own your own home, you make your own rules. You can park anywhere you like – within reason – and you can choose to garage your vehicle or use your garage for storage because it all belongs to you.

Questions to Ask

Before you go out and start shopping for a new house in Dartmouth, Fall River or Mattapoisett, it is important to consider all of your options and know what you are getting into. The best way to do that is to ask yourself a series of qualifying questions. This will help you figure out if you are ready to handle a home mortgage loan and everything else that goes along with it.

#1 – Do I have a reliable and steady income?

Make sure you will be able to afford those monthly payments!

#2 – How much debt do I currently have?

Consider all of your car loans, student loans, credit cards and other debts.

#3 – How much house can I afford?

Include your monthly credit union home loan payment, property tax, repairs and insurance.

#4 – Do I have any money saved for the down payment?

Find out more about required down payments, closing costs and other associated fees.

#5 – Am I ready for the responsibility of owning a home?

There’s a lot more to it than just making payments!

Advantages of Owning a Home

When you own your own home, you have a place to call your own. Home ownership is also a great investment and all of the money you put into it just adds to your expense. In many cases, your monthly mortgage, insurance and property tax will be less than the average going rate for a rental property. You might end up paying less each month than you are right now!

There are also tax benefits associated with getting a credit union home loan. Speak with your New Bedford credit union representative about tax benefits that can come from your annual mortgage interest and purchase points on a primary residence. There can be significant tax advantages for home owners that are not available to renters.

Disadvantages of Owning a Home

You will likely have higher monthly utility bills to heat or cool your home than you did in a smaller apartment. Water bills, gas bills and cable bills, which are sometimes included in monthly rent, will not be included when you own your own home.

Any repairs and maintenance that need to be done are now your responsibility. This includes landscaping as well. If you do not own a lawn mower or don’t have time to keep your property in order, consider how much it will cost for monthly landscaping services and add that to your monthly budget.

Where to Get a Home Mortgage Loan

Once you decide that you are ready for home ownership, speak with a representative at your New Bedford credit union. Once you find the perfect new house in Dartmouth at a price that you can afford, you’ll be ready to start crunching the numbers and doing the application process to secure your new home. Call or stop by St. Anne Credit Union in New Bedford for more information about all of the home mortgage loans, equity line of credit loans and other loan opportunities available.