When renting a house is the best option for you?

Being a homeowner is the dream of ordinary Americans. Renting is viewed by many as a temporary step to the dream home with green grassed lawn. But, there are times when renting can be the best short-term strategy instead of purchasing home. For example, if you’re going to be in an area a short time or your job is unsure, renting may be the best choice. That’s because if you buy, three years is usually considered the break-even point when you’ve built up enough equity to cover selling and improvement costs. But in some hot markets, that break-even point can happen in months or even weeks or less.
It can also be a good strategy to lease a home for a few months while getting to know an unfamiliar area. Taking time to do your First Steps to Becoming a Homeowner 5 homework on finding the right neighborhood and house can save you an expensive move later on.

However, sometimes it’s not that simple. If you happen to move into a market
where home prices are going up—often called a seller’s market—renting for more than a few months can cost you equity that you should be building. In a strong seller’s market, it can become a feeding frenzy. Buyers snap up homes they normally wouldn’t consider because of the fear that if they don’t buy now, they won’t get another chance. An upside of a hot market is your monthly payment is locked in as you ride the appreciation tide upward. However, if you’re renting your landlord will be riding the tide by raising rents and that means you’re paying off his mortgage faster, not yours. Not surprisingly, the flip side of a seller’s market is called a buyer’s market. In this instance, there are more homes for sale than there are buyers. Buying is easier, and good deals are plentiful, but this market also has its pitfalls.
The bottom line is that no matter what market you find yourself in, investing in a home makes the best social and financial sense.

Rent or buy the house?

George and Betty lived in a three-bedroom home in a good neighborhood. For years they lived there and raised their two children, both active in local community activities and their lifestyle
was similar to other families on their tree-lined street except one. They were rent their house. They rent from a nice good-hearted owner who lived just a couple houses up the street and use the home as an investment when he built his own home.
For 25 years, George and Betty rented their home and feel like it is their own, they repair it themselves, put some nice decorations, it simply a classic American family home. Then their landlord suddenly died of an accident and a couple of months later his survivors give George and Betty a 30-day notice to move. One of the heirs decided she wanted the home.
A shattering situation for both George and Betty, and this happens much too often. When you’re a renter you have little or no control over your housing future. Even more tragic in this case, the renter over the years paid off the owner’s mortgage and gave him a good tax deduction while the home’s value increase from $22,000 to $185,000! Just imagine if George and Betty use the rent pay for their own mortgage.
As the movers loaded furniture, Betty came across an old box she kept important papers in. There, neatly stacked, were 25 years and four months of rent receipts. All they had to show for their 304 monthly rent payments were a lot of good memories.
In reality, George and Betty had missed the boat. If the owners had offered to sell the home to the tenants, they would most likely have gotten a mortgage and ended up paying $185,000 for the house over the next 30 years. They would have paid for the house twice and made their last payment when they were 90 plus years old.
Most financial planners agree that it’s best to buy a home as soon as possible in life so that you can start building equity, get the tax breaks, and create financial stability.

Becoming a homeowner

Becoming a homeowner can be a fun yet a bitter experience. You can't wait to get out of the cramped rented apartment into your own home so you can do everything with it including decorating and landscaping if you can get a lawn. But, on the other hand taking on a financial commitment (mortgage) for 30 years can be frightening. All the what-ifs can animated into an horror movie through your imagination.

Basically, committing to a long-term mortgage is not much different from having a rental agreement. If you rent, you’re going to be signing quite a few leases over the next 30 years, and the terms are often less in your favor than a mortgage. However, they both have one thing in common: Make your rent payment and the landlord won’t bother you. Make your mortgage payment and the bank won’t bother you either. Except with the bank you get the house free and clear after decades of mortgage payments. With the landlord, you get a smile and a thanks for paying off his or her mortgage. The section of this blog will prepare you to get started on the exciting road to owning your own home. You learn step-by-step what to do and what to avoid.

About This Blog

Buying your first home is a major milestone in someone's life, maybe comparable with first date, buying your first car, or even marriage. That big step toward achieving the American dream can be a stressful and frustrating times. Hopefully this blog may accompany you just for this moment

However, so many people think that buying a home is like buying a car: drive around the blocks of sold houses until you spot a set of wheels (home) that you can’t live without. It's true that you can find a home like this, but the chances are significant that you’ll end up paying thousands of dollars more for the house, a higher-interest loan, and hundreds of dollars in unnecessary closing fees.
This blog will guide you avoiding this pitfalls and save you from your headaches