Before you go hunting for a new home, the FDIC has some things for you to think about.
It’s all over the news: home prices are at historical lows, interest rates are super-low. So, the story goes, don’t miss out on this rare opportunity to buy a home for your family.
Well, not so fast. A new home can be a really good move. But it’s not for everybody. The FDIC has published a very helpful rent versus buy article. Here are the top reasons to rent and to buy.
Freedom to move: If you unexpectedly need to find less-expensive housing or move to a different location, as a renter you won’t have to worry about the risk of selling a home for less money than you paid for it.
Smaller up-front costs: Renting may be the way to go if you don’t have the cash needed for a down payment on a home and for closing costs on a mortgage. Additionally, there is no need to worry about major maintenance costs: as a renter, you’re unlikely to be responsible for replacing a leaking roof or a broken furnace.
Monthly costs are often lower: Rent-related expenses usually will be less than what a homeowner would pay each month in “PITI” — principal and interest on a mortgage, property taxes and homeowner’s insurance..
Wealth creation: By paying the mortgage each month over many years, you will likely build up equity (the current value of the home minus what you owe on your loan) for a down payment on your next home or for some other purpose, such as retirement.
Emotional satisfaction: You can put down roots in a community you like. Owning a house can be satisfying in itself.
Fixed-rate mortgages add stability: Landlords can raise rents, but if you buy a home with a fixed-rate mortgage, most of your monthly payment — the part not including real estate taxes or insurance — won’t change for many years.
If you determine to buy instead of rent Peoples Bank will gladly assist you with your mortgage needs. For more information check out our Online Mortgage Center or call toll free 800-948-7195 and ask to speak with one of our mortgage loan officers.
Read the entire article for yourself: http://www.fdic.gov/consumers/consumer/news/cnfall11/rentorbuy.html