Slowing down on major spending
It is hard for make financial decision, when it comes to cutting back our excessive spending. This is especially true, when it comes to living in a house. There is always a state of confusion in our mind that buying a house is a better option. Alternatively, many people think that they can rent and save a substantial amount of money to buy a house, a few years later.
Benefits of buying a house
- Stability: if you buy a house, mortgage rates will remain same, even after some years. The stability on the price to pay even after certain amount of years will exist.
- Future savings: If you own a house, the mortgage payments are paid off in a definite time and after full payment, you can save the money for your future investments.
- Past studies: The chief economist, Trulia Kolko, has done various studies in some parts of western countries. He concluded that buying a house will cost 21-24% less as compared to renting a house. This statistic is obtained by including factors like interest rates, tax payments, home prices, rents on and many more.
Benefits of renting a house
- No extra spending: If you are living in rented house, you only need to pay for the rent and your bills. Your landlord is accountable for all taxes and maintenance. You do not need to worry about uncalled expenses on your house.
- Uncertainty about your job: If you have a transferrable job or if you are not certain about the tenure of your job, then buying and selling your house is a difficult task.
- · Increase cost in buying: Due to higher rates of mortgage in almost all cities, it is preferable to rent a house. Though rents have gone to the roof, the gap between renting and buying will continue to stay.
Factors affecting your decision
- Location: The locality where you are residing, and their land and rent prices will determine your choice.
- Financial set up: Your financial background is what determines your decision. If you are in debt or you have unsettled job, you have to think hard, before jumping on any decision.
- Duration of stay: Past studies indicate that if you are planning to stay for more than seven years, then it’s better to buy your house.
Make the initiative by taking the first step today. Whether you need to buy your house or continue renting, the decision will help you to cut back your excessive spending and help you to save for the future.