You have a steady source of income and a new fiancée. It has been a tough road until now, but with the help of your parents, you have managed to push through the first few years of adulthood. Congratulations, you are now prepared to take the next big step and get out of the house. Great, here comes a big package of difficult decisions you have to make as well. Should you rent or buy? Should you use the entirety of your available mortgage limit? Luckily, some simple rules can keep you from losing your mind or you are well-earned cash.
Deciding whether to rent or buy real estate can be one of the hardest decisions. Renting has benefits; not everyone wants to live in the same place the rest of their life. If you need a temporary place to live while solidifying some major life choices, renting is the choice for you. However, if you and your fiancée are planning to settle down and have a couple children, then being a homeowner has more benefits. For one, being a homeowner is a better return on investment. The money you pay for rent goes into the landowners pocket, while money you pay to mortgage goes to giving you the property. A house can be a great investment because once you own it you cannot be evicted and you can sell the house to fund some retirement plans. Failing to pay rent means, you cannot live in the house anymore, obviously, and you get no return on investment for the years that you dutifully paid rent.
Once you decide to opt to own a house, you head over to your local bank or mortgage broker to see how big of a mortgage you can take out. Banks, although they have gotten smarter after the recent recession, still try to get as much out of you as possible. By opting for the largest amount of mortgage they can safely give you, they have you trying to pay it off for years and years to come. Instead of being won over by the promise of a giant house, look to practicality when choosing a home. How long will you be burdened with mortgage payments? How much debt do you think a house is worth? Stay within your means when choosing a house and do not try to get as big of a house as allowable.
It can be tough to move out on your own. To look forward to a future of rent payments and mortgage payments can be daunting, but the ability to discern a good investment can lead to a fulfilling life for years after you finish paying off your mortgage. Good luck to you on your endeavor.
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