People choose to rent a house rather than own one for a variety of reasons. Some renters like the idea of ​​not having to cover the many costs of home ownership like property taxes, maintenance, and repairs.

Renting makes more sense for others because they don't know where to settle and they don't want to limit their options with a mortgage.

But if there is one downside to renting, it is that the money you pay your landlord each month is money you will never get back. In contrast, if you pay your mortgage every month, you are slowly but surely taking off the balance of a home loan. And once that loan is paid off, you can keep a very valuable asset – your home.

In fact, there are times when you get tired of spending money on rent. And given the rising rental prices, this point could come sooner rather than later.

Rental prices continue to rise

In July, according to Zumper, the average rents for one-room apartments rose by 7% compared to July. In the case of two-bedroom apartments, they rose by 8.7%. Rental prices have risen steadily since the beginning of 2021, while they rose minimally in 2020 and remained unchanged in 2019.

Should you keep renting?

If you are unsure of where to settle or your job is changing (e.g. better position to plan your future. Many people are in this situation right now because of the pandemic, so if you are not ready, take the plunge venturing into your home, you are in good company.

However, if you are interested in owning a home, it may be worthwhile to let your lease expire and start an apartment hunt instead. That way, you can invest your money in an asset that you can eventually call your own.

However, to see if you are ready to buy a home, ask yourself the following questions:

  1. Do I have funds for a deposit? With a conventional loan, you usually have to pay back 10% of the purchase price of your home upon completion. Some mortgage lenders only accept 5%, but not all lenders. In addition, it is generally better to pay a 20% down payment as it can avoid private mortgage insurance, a costly premium that makes home ownership more expensive.
  2. Do I have a strong credit rating? The higher your credit score, the more likely it is that you will snag a low interest rate on a mortgage. Mortgage loan candidates with scores in the mid to high 700s or higher are generally rewarded with the best interest rates available.
  3. How much debt do I already have? If you are currently juggling a bunch of loans and a credit card balance, you may want to hold off on home ownership. Once you take out a mortgage, you only add to your debt burden. Also, if you have excessive debt at the time of application, you may have difficulty qualifying for a home loan.

Buying a home could save you from having to spend even more money on rent. If you are interested in this route make sure you are in a good position to shop. And if you decide you're not ready just yet, that's fine too. Just keep in mind that once your current rental agreement expires, rental costs could increase.

source https://seapointrealtors.com/2021/08/09/rent-prices-rose-in-july-time-to-buy-instead/

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