Some say renting is cheaper than buying a home. However, buying a home is an investment in yourself and actually one of the safest investments you can make. Why make somebody else’s mortgage payment if you can make one to yourself?
Housing markets in major cities are often far more competitive than those in small towns or rural areas. That affects the rent vs. buy decision, as potential home buyers in metros frequently face significantly higher prices, fees and closing costs. Those high upfront costs can mean that it only makes sense to buy for homeowners who are willing to stay put for a longer time frame. According to data from SmartAsset, Phoenix is experiencing strong population growth, which has put some upward pressure on home prices. Residents who are comfortable staying in one place for the medium- or long-term should at least consider buying. On average, they will recuperate the high up-front costs of purchasing (instead of renting) in 5.7 years.
Today, there is no clear answer to the rent vs. buy question. In some cities, and for some individuals, buying a home may make more sense, while for others, renting a home may be the better choice. This makes it even more important to run the numbers and see what is best for you and your family.
In the end, the rent vs. buy decision comes down to your preferences, plans and personal finances. If you know exactly how long you want to stay in your home and where you want to live, and you have some money saved up, the decision could be as easy as calculating which option will cost you less. If your future is less clear, however, you may have more to consider.
Start by talking to a couple of licensed mortgage brokers. They can explain the pre-qualification process and help you come up with a plan towards buying your first home.
Figure out how much you can afford and the corresponding down payment. There are many Down Payment Assistance Programs available and many options from which to get the money you need: savings, IRA’s, Roths, gift from your parents or borrowing the funds.
Look for a trusted realtor that can help you narrow down your search by type of property and neighborhood that will fit your needs.
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