Hi folks, J.G. Wentworth here, continuing our previous blog discussion on how to make the right choice when it comes to renting or owning a property.
Here are six absolutely essential tips and strategies we recommend to anyone considering their first property purchase:
1) Take into account how long you are planning to stay in the property
The general rule – though it certainly has exceptions – is that the more time you’ll stay in one place, the more worthwhile it may be to purchase instead of rent the property. So how secure is your job? How many roots do you have in that specific area, and/or how likely are you to move again?
2) Don’t assume mortgage tax breaks are going to take care of all your home-buying burdens
Yes, the financial incentives the government gives to homeowners help a great deal. But in many cases, when you consider other homeownership costs – including added home maintenance expenses, property taxes, and insurance costs – the cost of owning a home even with mortgage tax breaks may be higher than you originally assumed.
3) Don’t assume property values will always rise
Of course, this seems obvious – especially in light of the fact that housing prices still have yet to fully rebound from the 2008 financial crisis. Nevertheless, many homebuyers convince themselves that the money they put down now to purchase a home will yield terrific financial gains over time. While that will hopefully happen, it is certainly not guaranteed.
4) Look extensively at the online ‘rent versus own’ calculators
The Internet has made it especially easy to calculate the costs of renting versus owning over time. Websites like Bankrate.com, yahoo.com, and realtor.com – to name only a few – allow you to enter details about your specific financial situation, and then come up with a calculation to indicate whether owning or buying is the preferable option. Play with the numbers and calculations as much as necessary so you can see how important each factor is to your financial bottom line.
5) The dreaded ‘roof leak’ scenario
The dreaded ‘roof leak’ scenario is an example of worst-case situations that you should take into account when you think about buying versus renting. If your roof suddenly leaks in a rental property, it’s someone else’s problem (apart from the dripping, of course!). But if your roof leaks – or anything else important goes wrong – in a property you own, thousands of dollars out of your own pocket may be required to fix it.
6) The bottom line: Take your time, be diligent in your research, and be patient
Please note that J.G. Wentworth is certainly not encouraging you to simply continue renting. All we are suggesting is that buying a home is a decision no one ever should take lightly, and that you should never rush into a financial decision of this magnitude without weighing all the pros and cons.
We hope today’s blog has given you some good points for reflection on what choice may be best for you. And if buying a home is something you are ready for, please remember that J.G. Wentworth is always available to help you get the cash you need out of your structured settlement or annuity and into your own pocket. Give us a call anytime at 877-227-4713.
Every individual’s financial situation is unique. J.G. Wentworth and its representatives do not provide financial, legal or tax advice. You should consult a qualified financial, tax and/or legal professional for advice and information concerning your particular situation.