Should I Continue to Rent or Invest In a Mortgage?
When you are deciding where to live you will first need to decide if you want to find a place to rent or whether you would like to purchase a home and have a mortgage. This topic can seem cut and dry but it really is not that easy.
If you have filed for a bankruptcy for example you will not be eligible for a mortgage until the bankruptcy has been written off for at least two years. This may seem like a short time, but after these two years you are not guaranteed at that point you will get a low interest rate so you may want to wait a few more years to purchase a house and get a mortgage.
If you do have a good credit and have not filed for bankruptcy you may feel like purchasing a home and having a mortgage is something that offers you a sense of security and stability as well as a sense of pride. This is an upside to purchasing a home and having a mortgage. However if you do not plan to stay in a location for a long time and you really don’t know what your future plans are as far as work, renting may be a better option for you since it typically does not bind you for more than a few years. Mortgages can be anywhere from 15 to 30 years so you should be pretty settled in your current job before you get one.
Cost is another consideration when you are deciding between renting or getting a mortgage. Usually when you rent you will have to put down a security deposit of a small amount, while mortgages can require a huge down payment. Sometimes the price you pay for rent can be higher than a mortgage payment because the cost may include utilities and such, where as with a mortgage these costs are still there but are paid for separately. When you own a home you will have to pay property taxes and homeowners insurance, which can add up to a lot of money. When you rent typically these costs are not included and can take a heavy burden off of you.
One thing you may want to consider when deciding between renting or getting a mortgage and purchasing is that once you purchase a home you will have to make your payments on time and always make your payments. If you do not or cannot make your mortgage payments you home may go into foreclosure. It is also important to pay your rent on time and to always pay it but if you are late you can talk it over with your landlord and come to an agreement. You need to not be late though so you will not stand to be sued by your landlord.