The Advantages of Owning vs. Renting

If you’re currently renting your home and have always dreamed of buying, this might be the right time for you to make the choice to swap over to home ownership. Many people are worried about this step in life. They fear they are not ready yet, that they won’t get approved or that they won’t be able to afford buying a home. However, in many cases, buying your home can be more affordable than renting. Let’s take a look at some of the other advantages.

Here are some of the advantages of owning vs. renting your home:

  • Your monthly mortgage might be less than the rent you are already paying so buying could save you money and you’re building equity at the same time.
  • You have control of the creativity and flow of your home more when you own than most renters. You can redecorate, renovate and otherwise personalize your home. You usually cannot do this when you rent.
  • There are also tax deductions that come with owning your own home. You can deduct your mortgage interest as well as your property taxes and these are not benefits you get as a renter. There are also tax breaks on the sale of your home.
  • Your housing payments are also stable when you own vs. renting, where rent can go up. If you choose a fixed-rate mortgage, your principal and interest payments will be the same for the duration of the loan.
  • Your home is an investment. You will own it and whether you decide to live in it forever, resell it or rent it out, you are investing into something that you will own. This gives you more leverage with whatever you do decide to do with it in the future. You don’t have this power when you rent.

Of course there are also disadvantages to buying. You will be responsible for all of your maintenance fees, you could lose value in the home over time, you have to pay property taxes which could be very high depending on where you live, and it requires a cash investment.

Now that you know the advantages of owning vs. renting your home, you can make this decision for yourself. Only you can truly know if this is the right decision for you at this point in your life but there are people who can help you with the process. A credit counselor and your real estate agent or broker can help you determine if home ownership vs. renting is right for you.

What Happens if I’m Renting and My Landlord Goes into Foreclosure?

What Happens if I’m Renting and My Landlord Goes into Foreclosure?

 

In the past, if you were renting and your landlord went into foreclosure, you could be immediately forced out of the home. However, times have changed and new laws make it possible for renters to live out their lease in most cases. In other cases, they may be able to recover costs from the original landlord.

 

Talk with Your Landlord

 

If your landlord goes into foreclosure and actually tells you about it, you may need to discuss other things, like utilities. If your landlord was taking care of the utilities as part of your rental agreement, you need to find out if that is still going to happen. Someone who isn’t making their house payment with your rent money may not be paying the utilities either. Try to get as much information as you can so you are able to plan ahead for the safety of your own family.

 

Thank You Obama

 

In 2009, President Obama signed an act to protect tenants from having their lives turned upside down if their landlord went into foreclosure. The Protecting Tenants and Foreclosure Act of 2009 was designed to give tenants a chance to recover from what to them may be an abrupt change.

 

The act basically states that tenants can live out their original lease undisturbed. Since some tenants live on a month to month lease, this could have meant that they had 30 days to move out. However, the act gives them 90 days to find a new home. The only exception is when someone buys the property with the intent to live there. In such cases, the tenant has 90 days, regardless of whether they live on a month to month lease or not.

 

Recovering Costs

 

Aside from potentially having to deal with a higher rent, moving itself is expensive. You may need to travel to investigate a potential rental, pay application fees, and rent a truck to move your furnishings. Renters can sometimes recover some of those costs by taking their original landlord to small claims court.

 

Naturally, while you are living in the rental, all of the details of the lease and your responsibilities still stand. It may be even more important to follow the lease to the letter in order to avoid being evicted because of your own folly. If this happens, you won’t be able to recover costs from your former landlord because you will have to move due to your own behavior and the details of the lease. Talk to a real estate agent about your opens if you do need to move. It may just be time to buy your own home!