Is Buying A Home Always Best?

Photo by Tierra Mallorca on Unsplash

Are you thinking about buying a home? You might assume that this is always going to be the best decision, particularly if you are raising a family. However, this may not be the case. There are numerous reasons why buying a home may not be the best option. So, let’s way up all the factors to keep in mind here. 

Is Renting Dead Money?

The strongest arguement for owning a home is that renting is dead money. Essentially, this means that you are getting nothing from your home in the long term. Instead, your money ends up in the pocket of the landlord. You have no claim to ownership. While this is true, it can be worth it if renting is more affordable compared with buying. You should continue to rent until your finances are stable enough to afford a mortgage. 

When Shouldn’t You Buy?

You shouldn’t buy a home if you can’t afford a significant deposit or a beneficial mortgage. The general rule is that you need to save at least 5% of the total home cost for a deposit. However, experts claim that it will be in your best interest to try and save closer to 20%. In doing so, you will be able to access the best mortgage rates available on the market. Do be aware that getting the right mortgage will also be contingent on factors such as your credit rating. If you have a poor credit rating it will be more financially viable for you to continue to rent rather than buy a home. Do be aware that while bad credit mortgages are available on the market, they are commonly referred to as debt generators. 

What Are The Hidden Costs Of Buying?

You might assume that the only cost you need to worry about when purchasing a property is the initial price. However, this is not the case. Instead, you will need to make sure that you do think about hidden costs that are associated with the purchase as well. For instance, you’ll be responsible for any costs to pay for property repairs. If you are renting your home, this won’t be the case. Instead, it will be the landlord that will be responsible for repairs that weren’t due to a problem you caused. 

That’s important to keep in mind as some property repairs can range in the low thousands. This includes a boiler repair or an issue with the windows. Do be aware that if your landlord fails to repair the property then you can file a housing disrepair claim to ensure that the work is completed as quickly as possible. 

We hope this helps you understand some of the key reasons why buying a home isn’t always best. Before you purchase a property you should always think carefully about your decision. Specifically, you need to consider your financial situation and whether you are going to be able to afford the home in the long term. Do be aware that it’s not uncommon for property purchases to cause people to end up with significant levels of debt.