Deciding on whether to rent or buy a home is a major decision. Both have their pros and cons; some may argue that renting gives them the flexibility of not being tied up in one place, while others are tired of renting because they feel like it’s a waste of money in the long run. That’s why for most people, homeownership is one of life’s ultimate goals.
However, how do you know you’re ready to transition from renter to owner? There are several aspects you should consider before you forego renting. Here are eight signs for you to stop renting and start owning a home instead.
1. Your family is growing
If a studio or 1-bedroom apartment isn’t holding up for the size of your family anymore, it’s best to consider buying a home. Not only will the household be able to sleep comfortably and move around freely but it’ll also be more convenient for everyone to have their own space.
Many renters purchase homes from a real estate broker in the Philippines whenever they step into a life milestone such as getting married or having children. When you rent a property, your life can feel like it’s in limbo since you don’t own the place. Homeownership presents the idea of permanence, providing comfort, freedom, and stability for you and your kids.
2. Your rent keeps going up
Since the landlord owns your rented home, they have the right to raise the rent as they see fit. Landlords often increase their rents due to inflation and increasing costs of upkeep. While you’ll still have to pay a monthly amortization when you become a homeowner, your payments are going towards your very own asset rather than down the drain.
3. You’ve saved enough for the down payment
Coming up with a down payment is the biggest challenge in homeownership. The amount of down payment will depend on the kind of home loan you get or the loan provider.
For a bank housing loan, the usual down payment amount is 20%. In addition to this, there are closing costs you have to pay, like documentary stamp tax (1.5%), transfer tax (0.5%), title registration fee (0.25%), and other incidental expenses. If your budget is enough to cover the down payment and the other expenses to be incurred when buying a property, then you are ready to buy a home.
4. Your income is stable and increasing
The number one factor lenders look into when reviewing loan applications is whether the borrower has a stable income. If your finances are in good order, there’s a high chance your home loan can get approved. Homeownership is a big financial commitment, so keeping your finances solid by having steady employment or going into a profitable business venture will allow you to afford the responsibilities of owning a home.
5. Your credit score is in good condition
Having a good credit score dramatically increases your chances of being approved for a home loan, taking you one step further along the path of homeownership. Moreover, a good credit score can lower your interest rate. To improve your credit score, you should make it a point to pay your debts on time and to never default on them.
6. You found a neighborhood that you want to live in
Neighborhoods are a big factor in choosing a new home. You need to thoroughly check different aspects of the community like the school district, safety, accessibility, and affordability of home prices. If you’ve found the perfect neighborhood you want to settle in for at least five years, you should latch onto it before it gets snagged by someone else.
7. You want a place to call your own
One of the big downsides of renting is that you’re not allowed to make certain customizations, such as drilling a screw to the wall without the express approval of the landlord. In contrast, the perks of owning a property include giving you ultimate freedom with your space. If you buy a house with a yard, you can dig up the grass and plant a garden. You can even bring in your pets, something that not all rental properties allow. Buying a home entitles you to your own space that a landlord doesn’t regulate.
8. You’re ready to put down roots
You’ve arrived at that point in your life when you’ve found a stable job and have no plans to change careers or move across the country for the next five years. If you feel secure about where your life is headed, it may be the time to settle and put down some roots. Form your real estate checklist to enter the next stage of your life—purchasing a home.
Take the Plunge and Buy a Home
If you’ve ticked most of the signs above, then you should seriously consider becoming a homeowner and stop renting. Renting is great for those at the stage of exploring their career paths and building their financial status. However, it’s not an ideal end goal.
Owning a home allows you to pour investments for yourself rather than for someone else. So, if you can, take the leap to homeownership. Find the best property deals by reaching out to experts at RE/MAX for a free consultation!