To Buy Or Rent – That Is The Question Today!

Who should own a house? It used to seem obvious that owning our own home was a goal that everybody wanted to reach. But these days, with so much dire news about foreclosures and job losses, is this still true? You must really take a good look at the true costs of owning your own house before you decide the best thing to do for your family.

The days of zero down loans are pretty much gone. Good mortgages, with fixed interest rates, seem to come with large down payments. Even if you have twenty to forty thousand dollars to put down, will this deplete your cash fund? That may not b such a good idea when you think about other costs and risks associated with owning a home. It is never a good idea to be cash poor.

Think about the length of time you plan to live in the house you want to buy. Home owners, who stay put for years and decades, tend to be more satisfied with their purchases. If there is some chance you will have a job change or transfer in the next few years, you should weight that in your decision. It is so much easier to get out of a lease than a home purchase! It should be obvoius that you will not be able to get any guarantees that your home will sell for a good price when you need it to.

Lots of ads promote the advantages of purchasing your own home by comparing rent vs. mortgage payments. I think these really attract people, but those people are a little naive. Even if loan payments are $100 cheaper than rent, that will not cover insurance, property taxes, upkeep, and repairs. You have to realize how many bills that home owners have to pay before you know if this is a good time for you to buy.

Beyond mortgage and taxes, you will have other expenses. When your roof leaks or your dishwasher fails you will not have a landlord to call. Instead you must call a repair company. Do you have cash set aside for emergency repairs?

Some neighborhood associations also charge large fees. Make sure you understand how much they charge. In some places, this is very modest, but in others it is quite large. These fees pay for upkeep of common areas, swimming pools, etc. They must be paid every year in most places.

You will also need to purchase a policy to protect your home. Costs vary, but expect to pay anything from several hundred to a few thousand dollars a year. You could argue that you had renters insurance when you rented, but this is usually much cheaper. Homeowners insurance covers your building, property, contents, etc. Renters insurance only covers property.

Now many realtors will cite the tax benefits of property taxes and mortgage interest. But you can only take advantage of this if yours are higher than the standard deduction that everybody gets to take.

I understand the advantages of home ownership. But I also understand that the decision to buy your own house should not be made lightly. Make sure you really figure out how much it will cost you to own before you buy.

Look for a Texas Real Estate pro.