Decision time: Should I buy my own house or continue renting?

One of the biggest decision you may ever have to make in your life will have to be about your present and future living condition. It is a huge financial commitment that you’ll have to carefully  plan and think of everything before choosing. For most people, renting has been a favourable and convenient setup; while others have seriously been considering buying their own homes as part of their long term goals.

But how do you really know what’s right for you right now and in the future?

Mortgage or Rent - Which is Which?

Buying your own house has its challenges. It isn’t just about reaping the fruits of your labour, but also making sure your living condition is in tune with everything necessary in your life. When deciding to finally buy your own house over renting, you should take note of the following ups and downs.

  • Once your mortgage is paid off, the property is yours and could be valued more than how much your bought it for over time.

  • If your home’s value increases, you can use that you upgrade to a bigger home, or downsize for your retirement and have more money to spend.

  • Retirement often means you won’t have enough money to pay the rent, so owning a home and having paid off the mortgage means you’ll be living rent-free for the rest of your life.

  • You may generally save up to more than £1300 a year in paying your mortgage over paying rent.

  • You can spend money remodelling or renovating, whereas renting limits you to only what the landlord allows you to do.

The Challenges of Buying a House

It’s huge, and you need to make sure that you can afford it.

When interest rates increase, your mortgage repayments will also significantly increase. You should always note how much the changes are going to be so you can adjust your budget.

Maintenance can be costly, whereas your landlord would generally cover the repair and maintenance expenses.

Flexibility is likely to be an issue, especially if work requires you to move to a different area or if you need to live somewhere cheaper.

If you’re sharing the property’s ownership with a partner, a friend or a family member things have gone a bit sour, sorting out the property may be complicated.

Is It Better to Buy or Rent?

There’s really no definitive answer to this question, and it all depends on your financial status, your current living condition, and your future plans.

If you buy your own house and its value unfortunately falls, you may be unable to sell it because you’re going to owe more to your mortgage lender that how much the property is worth. However, if the house price shoots up, a profit can be foreseen and you could use that to fund an upgrade, downsize and get more money, or fund a business.

Can You Afford It?

It all depends on how you figure out and get your financial status sorted. Buying a home does not just involve the property’s selling price. There are still so many associated costs that you have to have the money to spend upfront, and they include the following:

  • Deposit

  • Legal costs such as solicitor’s fees

  • Survey cost

  • Stamp Duty

  • Removal costs

  • Your monthly bills – such as gas, electricity, home phone, etc.

If you think you cannot afford it right now, think of saving a little more money from what’s left in your income after rent and other expenses, so you can achieve your goal in the future. If your earnings are not enough, you can try and buy your first home through various affordable home buying schemes that the government and other organisations have implemented over the last few years.