Uncategorized August 18, 2015


To Rent or to Buy?

Considering making the leap from renting a home to becoming a home owner for the first time?  Financial experts don't always agree on the best way to keep a roof over your head, because there are advantages and disadvantages to both scenarios. 

You may be better off renting if:

You have recently claimed bankruptcy or you are working through some challenging credit issues.  Rent rates are determined based on the property itself, not the financial situation of the borrower.  Mortgage lenders tend to reserve their most competitive rates for those applicants who come to the table with picture perfect credit.   Paying a higher interest rate on a mortgage will cost you thousands of dollars more, so it is often advisable to continue renting until your credit is repaired.

You are only planning on living in one place for a short time.  Will your home appreciate in value in a year or two?  It may, but there are costs associated with selling a home, breaking a mortgage and moving.  If you are only planning on living in one place for a short time, renting is normally a better financial decision.  Home ownership pays off, but you need to be patient.

You are in the process of a life transition.  Life is full of changes like new jobs and new relationships.  Sometimes the excitement (or stress) of a major life event can cause you to forget your long term needs and focus only on the home that works for you right now.  If you are just coming out of university, or perhaps getting out of a marriage, it may be wise to rent for a year or two until you have a clearer picture of where you'd like to be.

Owning your own home might be the right choice for you if:

You are searching for a place to call home for at least a few years.  The longer you live in a home, the more time you have to pay down the mortgage and build equity.  Typically, owning a home is a better long term option than renting.  With exceptionally low interest rates, many buyers are enjoying surprisingly affordable home ownership options in the Portland area.

You want to live in a space that you can customize exactly the way you want.  Do you love custom finishes and rooms that compliment your personal style?  There is only so much you can do in a rental property without throwing away your hard earned money.  Owning your own place opens up a world of options and lets you create a space that truly feels like home.

You don't want to deal with paying rent (or a mortgage) when the time comes to retire.  If your golden years are approaching, you are probably looking forward to leaving work behind and spending more time doing the things you love.  Owning your home outright will free up more cash for traveling and whatever else you have in mind.  In most cases, home ownership is an essential component of financial freedom.

Ron Tinsley ~ Realtor