Choosing Between Renting or Owning a House


Building equity is one of the major financial reasons for which people are interested in buying homes. In 2008, the U.S. housing market had incurred a loss to much an extent, after which, various prospective homeowners as well as existing homeowners were looking at the cost and the benefits that can be made from such transactions.

Reasons to own a house

Here are the reasons suggesting that you should rent a house.

Flexibility: Renting a house will enable you explore an area before making a long term commitment to the homeownership.

Uncertainty in career: If you feel that in near future you will be transferred to some other place or out of the town or in the outskirts, then you should rent the house. This is a wise decision as owning will tie you down to a great extent.

Poor credit: Making rental payments timely will help you build a sort of credit that you would need to fulfill your mortgage.

No expense of maintenance: When you find any type of fault or any part of your home that requires a repair, then you can simply dial to your landlord to solve the problem.

Real-EstateReasons to own a house

Below are the reasons suggesting that you can own a house.

Creating art: There is no need to worry before creating an art or hanging a clock or colorful hangings on the wall. You can also paint them red, orange, yellow, green, peach or any color of your choice. You can also make shelves, cupboards, or any kind of changes as per the requirement. They are yours, and you can just do what you wish.

Maintenance desire: If you own house, you can do the repair as per your pocket permits. You can have cheap repair temporarily or you can pay heavily for an effective result.

Equity: You can save enormous amounts of money if you own a house. With the saved amount, you can have a handsome interest from the bank or you can purchase a piece of land in the city which would be a great asset to you in the future.

Well, if you talk the about the cheaper options of the two, then it totally depends on the place where you live as well as the improvement that you want to make at the home. The two shares pros and cons equally, and so you must decide and act as per your comfort both professionally and personally.

Read Also Right of the Renter Elaborated Briefly

Construction of new house or purchasing old homes

Many houses. 3D render scene.

It becomes very difficult when one has to make a decision between constructing a house and purchasing an old one.

Pros and cons of newly constructed home are as follows

  • The contemporary style of the house
  • Warranties that are extended
  • Cheap to operate (power-efficient construction).
  • Having homeowners frequently
  • Cohesive neighborhood
  • You can make changes or modify it as per your wish.
  • Quite cheap to maintain it. While you construct new a house, you would be installing new appliances that mean fewer repairs.
  • It helps protecting the resale value.
  • It is fantastic and soothing to live in a brand new house that you have constructed on your own.

You must look into a few important points illustrating that the cons of newly constructed house.

  • Walk down to a nearby street. If you see a development in those areas, then you should try to know from the residents if the builder had performed quality work as well as lived up to contractual commitments.
  • Figure out your home properly and not model home. You can have counters of granite, home theaters with high productive sound. These expenses are not included in your base price, and instead you have to pay additionally for such facilities.
  • Try to have your own agent. If the builder you hired has an agent of real estate, then try to seek help from them as they work fabulously.

Old is gold

With the springing up development, new construction is in high demand. People are interested even to buy resale homes that are used by someone else earlier. This kind of house shares the pros and cons equally. Let us see the pros of such houses below.

  • Developed neighborhoodask-the-realtor-build-or-buy
  • Transferable price
  • Holds more character and charm.
  • More style and more choice to choose from.
  • Issues that might have risen earlier are revealed in disclosure of documents.

After reading the pros of purchasing resale homes, let us proceed below to learn its cons.

  • Outdated design, art, amenities as well as older appliances that would require frequent repairs and thus, distracting you in your work.
  • More maintenance
  • Used house
  • Expensive to operate

If you have decided to buy a house, and you detect any kind of flaws or repairs that are to be done necessarily, then you must report it to the landlord or ask him or her to lower the price.

Read Also How can you get a pre-approved loan?

Take a Look at the Checklist of Renters


It is very important to rent the right person. Renting a wrong person can trouble you in many ways. It can affect your commuting time, eating, sleeping or while you shop, etc. So you must inquire properly as once you sign a lease it is difficult to break it. Here below are a few key points that would help you inquire before renting someone.


Sometimes, the landlord might pay bills for sewer, water, garbage, heat as well as for cable. These bills of every month can be used to transfer costs up down or front the road. Ask him to see the bill over several months to watch heating as well as air conditioning costs.


Ask them if they would like to get the payment by mail or by check or direct deposit. If it happens that your rent falls on a holiday, then remember that direct deposit can be delayed sometimes that would incur delay charges. You must know if smoking is allowed or not. This is so because if you are not a smoker, then smoke will harm you in every possible way. You should ask the tenants regularly to know how your property is used by them.


Make sure the storehouse is clean enough to store maximum assets. If not, then one can only keep his outdoor furniture or bicycles. The location also plays a major role. If it is near, then it can save enough time and money, and if it is in an isolated area, then it would take much time and increase the costs of transportation. Ask the manager, if the cable is installed from before or there is a need to install any.


You should have a good conversation to know the comforts of the property.

Read Also Choosing Between Renting or Owning a House

Qualifying your home for a mortgage

loan-modification-Your mortgage loan grabs your land as well as your house as collateral. It is not a pound of flesh but the loss incurred can be a very threatening one. In many cases, lenders do not wish to give up with the house. You must maintain paperwork in a sequence before you find out a lender. On the other hand, you must also know the below listed jotted lines.


Lenders look for Loan to Value when they write for a loan. You can divide the loan amount by the appraised value of the home to stand with the LTV. Do not worry if your LTV is high as you can still get the loan provided it will be charged with a high rate of interest.

Debt ratio

You have to consider two debt-to-income ratios. First, look at your housing ratio that is your costs of homeownership plus monthly house payment. Divide the amount received by the gross monthly income. The second one is the debt ratio. Take all of your revolving debt or your monthly installment along with your house expenses. Divide the very amount by gross income that will be your debt ratio.

Automatic underwriting system


Gone are those days when your lender would sit with you for hours to get your loan. Today, in the fast working era, you can qualify for a loan through an automated underwriting system. This is a software program that looks like your debt ratio as well as the credit score. Many lenders use AUS in order to pre-approve their borrower. Here, you need to provide required information for further procedure. You will also need to provide more evidence to prove the given documents with AUS.

Down payment

Earlier, lenders appreciated down payment of at least twenty percent of the home value. There are various types of mortgages that need lesser down payments. You should be aware of the fact that if you put less a down payment, then your lender would scrutinize you more. If you cannot pay twenty percent down payment, then your lender will try to secure himself against the losses with private mortgage insurance or (PMI).

Read Also Take a Look at the Checklist of Renters