W.W.Y.D.: RENT OR BUY?

Are you on the fence about whether to rent or to buy? You just need a wee bit of emotional readiness to choose a home with your style in a location that meets your lifestyle needs. For home buyers, the challenge is building a good credit history and saving for the deposit. For renters, the challenge is in paying monthly payments to something you will not own in the end. So below are three questions to help you decide if you want to buy.

courtesy of www,dreamstime.com                                     

 What is driving you to want to buy?

•  The cost of renting is growing more and more expensive.

•  Need more independence and space from parents or roommates.

•  Looking for a wealth building tool to pass down to your family.

•  Want to customize a home to your personal preferences and lifestyle.

       How does your finances measure up?

• Utilities and parking are not always included with home owner association fees and therefore it becomes an additional expense. But renters can find most times that the utilities are included with the rent payments. Other expenses for home owners are hazard insurance, co-op/home owner association fees, property taxes, and sometimes private mortgage insurance.

• Most mortgage lenders require your loan to carry a monthly payment lesser or equal to 36% of your net monthly income. Use calculators like ones on Bank Rate to determine how much you can afford. 

• Just like rent applications require a security deposit, home purchases require 3.5 to 20% of the total purchase price in earnest money to show how serious the buyer is for the investment.

 How much freedom do you require?

• If you own the home, you are given more freedom to build, reconstruct, and redesign but there are some home owner associations that restrict renovations.
• There is a return on the investment in the form of equity as the home appreciates for home buyers.
• If you buy your home, you may be able to receive a more direct benefit from renting the entire home or a room as an additional source of income.
• Buying a home is a long term commitment since most mortgages are 15-35 years for a payoff. Also, if you choose to sell the home it can take months or years depending the property and its location.

	BUY	RENT
Credit history plays a major role in payments	X
Receive a return on the investment	X
Consequences for 3 missed payments	X	X
Freedom to renovate freely	X
Home maintenance and upkeep needed	X	X
Avoid scammers that seek vulnerable people	X	X
Requires emotional readiness	X
Long term commitment	X
Pay property taxes	X
Property insurance encouraged	X	X
Tax benefits are available	X
Require a form of earnest money or deposit	X	X

Home is where you make it so there is no right or wrong answer, just a search for the best answer for you. If you still need to decide, take your time and keep researching sites like realtor.com. If you made your decision keep following us for ways to grow financially to continue to be at peace with that decision. Catch our next blog on February 30th about the steps in the home buying process! Feel free to leave comments on this post or social media on instagram @practicalwallet,, twitter @practicalwallet,  and pinterest @practicalwallet.

  

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Please Don't Wake Me Up!!!

Oh hey, did we have the same dream? You know the one I'm talking about. The dream of when you reach under your seat to find an envelope taped to your chair. And inside of the envelope is a silver key. Then you look up from the key, into her big brown eyes and its Oprah grinning hard...YES I SAID OPRAH...she screams and points to you and the other audience members “YOU GET A HOME, YOU GET A HOME, EVERYONE GETS A HOME?"

via GIPHY

Okay okay, now maybe that was just my dream but please don't wake me up! Maybe I dream too hard or maybe I don’t dream hard enough. Only time will tell. What is real is my debt which is double my income and like most people I don’t qualify for any type of assistance so I just pray and plan. But like Les Brown says if “you fall, fall on your back. If you can look up, you can get up!”

 Sometimes it can feel like the our problems are the worst but things could and can get worst. Bottom line is our problems shouldn't handicap us, we have to imagine our problems on an obstacle course-we can go over, around or through but don’t just give up. Some of you may think as you read that I am an expert, financial wizard, or at least a previous home owner or maybe at least a child of a home owner.

The answer is no to all of the above instead the truth is I have been gathering resources and information and keeping notes everywhere, screen-shooting anything that I can use or benefit from, and everything is scattered. I started transferring my notes to my computer and realized that I can help more than just my family and friends. I can reach a lot of people in similar circumstances or people who just don’t know where to start; I can guide them based on what real experts are doing and share their success stories and paths.

Now I named this blog a very weird name and I realize it’s hard to put on a t-shirt and sell it but I’m not selling anything (in this moment) other than inspiration. If you were shopping in Macy’s for a “practical wallet” you would want a wallet that has lots of sleeves to put credit cards and IDs in and maybe some family pictures and then a convenient place for cash. This wallet would be nice on the eyes, maybe leather, if mines it would be pink and the right size.

Well this practical wallet is going to create enough sleeves to direct you in a practical path of home ownership, retiring financially secure, and building financial security for yourself and family. Like I said earlier, this is a platform to inspire people and help you recognize the tools to protect yourself and invest in yourself in the areas of home ownership, retirement, and personal finance. 

There is so much to take in so check back often and read my posts on the 5^th, 15^th, and 30^th of every month, use the information in your plan as you see fit, leave feedback, share my posts, and subscribe to stay in the loop. My next blog post will dive into a benefit comparison of home ownership versus renting on February 15th, 2016.

Feel free to leave comments on this post or social media on instagram @practicalwallet, twitter @practicalwallet and pinterest @practicalwallet