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How much it too much when looking for a place to live in?

20 October 2017 No Comment

Purchasing a home is a huge expense. It’s one of the biggest expenses you’ll ever have in your life. If you choose to get a mortgage, then the next 15-30 years of your life will have you taking a sizable chunk out of your income to make regular payments. If you’re unable to keep paying the mortgage, then the worst case scenario would be that your home goes into foreclosure and your credit gets destroyed.Which is why purchasing a home can be a huge risk.

Renting is still a risk too. It’s also a big expense, and although you have more freedom because you can leave after your lease term is up, that doesn’t men renting is simple. You’ll have to have good credit and put money down for a security deposit. The monthly payments can go up as soon as your lease ends, and if you want to keep living there you’ll have to start a new lease with the new rates.

Whichever option you pick, if the monthly payments are too large, then how will you be able to do other things with your money? Having a retirement fund, paying for your children to go to college, or even just wanting to have extra money to pay down debts or even go on vacation.

To pick having a mortgage vs renting a place can be a tough choice to make, so here are a few more reasons to help you pick one:

When you rent, one huge pro is that you won’t have to pay for the maintenance of anything. So if anything stops working or something on the property needs to be fixed (that you didn’t break), the owner will have to come over and do the repairs. The owner usually also will pay any HOA (homeowners’ association) and other types of community fees. So that you’ll get the same bonuses in your community that homeowners do (like pool and amenities access, home insurance, trash removal, pest control, etc.).

What would it be like to live in this type of community? To see what it’s like to live in a luxury and very affordable condo (with many other benefits and perks!), check out: http://the1yongecondos.com/.

If you choose to rent, then see how much income you can afford to spend using this calculator: https://www.realtor.com/advice/rent/how-much-rent-can-i-afford/

Having a mortgage will mean that any repairs are 100% your responsibility. You can buy different types of insurance for emergencies, but most major repairs will have to be paid for out of pocket by you. Lawn care can also be a fairly huge expense too depending on what you want to do with your lawn. However, having a house will mean you will be able to take tax deductions, like deducting your mortgage interest. You also will be able to take other deductions when you’re self employed.

To see how much of a mortgage you can afford to have, including the monthly payments and other fees, check out this calculator:https://www.nerdwallet.com/mortgages/how-much-house-can-i-afford

There are other things to consider besides whether you should rent or own. You need to look into the neighborhood you want to move in. See what the crime rate is, the quality of the schools, if there’s any construction going on that could lower the value of your property (or even increase the value, like for example if a new housing development was being built), look at the Walk Score (commute time) and see if it’s right for you: https://www.walkscore.com

To save money and still be able to find a great place to live, the number one tip would be to do things carefully. Don’t just get what looks nice but actually dedicate the time to see what the best fit for you would be. If that means looking at multiple properties, then that may be what you have to do. Get the home that you need to have, and that will add to the quality of your life the most.

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