When taking a look into your future, there are three main things that you and most other people imagine having in their lives: a family, a career, and a home. While having a family and career is somewhat unpredictable, deciding where, when, and how to find a home is a challenge that everyone faces. However, once this challenge is accepted, the big question that pops into the minds of these potential homeowners is, “To Buy? Or to Rent?”
The choice to either buy or rent their home is becoming to be one of the biggest financial assessments a person will have to make. For obvious reasons, people use different types of mortgage calculators to generate a solution either to rent or buy homes based on financial projections.
Calculators allow potential home owners to base their purchasing decision based on key, specific factors. To predict the most viable outcome, home prices, estimated duration of staying at the new house, mortgaging details, changes in the market, taxes, closing costs, and maintenance fees are all taken into perspective.
In addition, certain variables that help potential home owners estimate whether to purchase or lease include all initial costs to buy or rent, all recurring costs, and the estimated net proceeds.
In terms of buying, potential home owners can expect to pay an initial down fee for the house, and other fees associated with finding the property.
The costs that recur when purchasing a home include mortgage payments, living fees (either the apartment/condominium dues or community expenses), renovation/maintenance fees, homeowners’ insurance, and property taxes.
Finally, the net proceeds is the final amount of money received when selling your home, subtracting all the closing costs. Ideally, a successful investment would mean that you made enough profit to cover the purchasing of your home along with all the expenses in between.
In terms of renting, things are generally far less complicated. The initial costs generally consist of only the security deposit, a recurring costs consisting primarily the monthly rent and insurance. The overall net proceeds of renting is simply a return of your security deposit.
In summary, when having to make that decision whether or not to buy or rent your next living space, always use the math, and analyze the financial details deriving the suggested option. If any questions do arise, we at Creekside Mortgage are here to help you, and are here to walk you through to a decision that best fits your financial needs!