How to Stop Renting and Buy Your First Home
Should you rent or buy a home?
There are plenty of online resources that help break down the pros and cons of owning a home. More Americans are renters now than at any time in the last 50 years. With these changing statistics, many people are asking: do I want to buy a home? If so, how do I make it happen?
Buying a home is a huge decision that shouldn’t be taken lightly. Although there are numerous steps in the homebuying process, the biggest one is figuring out your finances. Of course, there are lifestyle considerations, such as career goals, school districts, and willingness to stay in one area that determine whether you should rent or buy.
This guide is designed to help anyone trying to decide whether they should continue renting or buy a home. If you‘re ready to start the homebuying process after reading this guide, check out our first-time homebuyer resources or talk to a Chase Home Lending Advisor!
How to decide if you're ready: lifestyle considerations of buying versus renting
Let's start by discussing the pros and cons of renting vs. buying from a lifestyle perspective. Keep in mind, buying a house isn't for everyone. Ask yourself:
- What's my current lifestyle? Am I ready for a long-term investment?
- Where do I want to settle down? Can I afford a house near my work? Is the neighborhood I want to live in in a good school district?
- Do I want a house? Condo? Townhome?
- What's the job market like in the city I want to live in?
- What's the general cost of living in this city?
- Do I have the money or ability to take on a fixer upper? Do I want a new home?
Your lifestyle plays a major part in your readiness to buy a home. These six questions are by no means a comprehensive list of things to consider when deciding to buy a home. However, if your answers indicate that you need more flexibility, and that you need more time to make a decision, it may be best to continue renting in a location you find desirable. That way, you can determine the neighborhood, costs, and lifestyle advantages of the area you’re considering buying in.
Of course, if you feel you're prepared to buy, great!
How to decide if you’re ready: financial considerations of buying versus renting
The first stage in the homebuying process is understanding your finances and determining whether renting or buying is best for you.
Things to help improve your buying power
- Improve your credit score
- Pay off debt
Buying a home is a long-term commitment with many mortgage terms lasting 30 years.
When renting, you're locked into a monthly payment for the term of your lease. Once your lease expires, your landlord can raise your monthly rent.
Considering your needs
Deciding if you want to continue renting or if you’re ready to buy a home depends on your needs and current financial state. If your career requires you to relocate often, or you're just beginning to save money, then owning a home may not be the best move right now.
However, if your career has stabilized and you have the financial means to buy a home, considering one of our purchase products may be the next step in your home buying journey.