Are You Planning To Rent or Buy?

A house is expensive and a huge investment for people who are looking to settle into one. A person seeking a house should decide wisely and purchase a home that would be a good investment for the future, as prices and sales of houses go through its ups and down in the market.

As prices of homes slowly increase over time, homebuyers will have to wait to get their investment back from the mortgage company that has financed their purchase.

What are Transaction Costs?

They are labeled as the beginning payments for the title insurance and the commission the real estate brokerage receives from the sale of the house. Therefore, the price of the home increases by 10%. Plus, the homebuyer’s first loan payment for a house goes towards interest in mortgage payment plans.

How Fast Should You Sell Your Home?

If a homebuyer has to move out quickly or change cities or countries with just a few years of living in that house, they would be susceptible to lose money more quickly, even if the house has increased in value since they bought it.

So, ask yourself how long do you plan to stay? If you say 5 to 7 years, then it is suggested that a person should look into renting a home instead of making a purchase.

Facts about Renting Vs. Buying

Beth Pinsker, a journalist, writes in her “Your Money”, column that there are calculators that calculate how long a person will stay in a house, but they are based on the assumption that homeowners will at least live in the house for at least seven years.

Some economists like Jed Kolko say that homeowners tend to live in their house for at least 8.5 years, while publisher Ilyce Glink says that purchasing a home shouldn’t be labeled as an investment unless the buyer plans on staying for at least 10 years.

So, are you planning to stay or move out?