Is now the time to buy a home or keep renting?

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This is a common question no matter what the real estate market looks like, and one that doesn’t always have an easy answer. With today’s seller’s market white hot and little inventory to choose from, it has many potential buyers wondering if it’s the right time to buy.

One of the biggest benefits to being a homeowner is building equity with each mortgage loan payment that you make vs. just giving money to a landlord for rent. However, that doesn’t mean buying is always the best choice. As a renter, you have more flexibility and can avoid many costs that come with owning your own home.

Choosing to buy vs. rent is a very personal decision as everyone’s financial position is different. If you move around a lot or don’t want the hassle of maintaining a property, renting may be the better choice. If you plan to live somewhere long term and want to be able to make changes to the property, then owning may be a good choice.

Here are some questions to think about to help you decide what’s right for you.

  • Can I qualify for a mortgage? Unless you’ve been saving up to purchase a home with cash, you’ll need a mortgage to purchase a home. Before you start looking at houses, it’s best to choose a lender and see how much you pre-qualify for. They will look at your debt-to-income ratio, job stability, credit history, savings, etc. If you don’t qualify right now, work on your finances while you continue to rent.
  • Can I afford the closing costs? Saving up for a down payment is just part of the home buying process, but there are other costs called application fees and closing costs that you’ll have to pay. These include fees for appraisal, attorney, realtor, etc., and can be about 3% or more of the final purchase price.
  • Can I afford to live in the town or neighborhood? Purchasing a home has other fees associated with it other than just the cost to buy the home. Depending on where the house is located, your additional fees like taxes, insurance, HOA’s can vary. Before signing any paperwork, you should have a clear idea of what the additional costs will be. You can ask your realtor to help you determine HOA and taxes and your insurance agent to give you a quote on homeowner’s insurance. Fees can vary widely across your state and even between different neighborhoods.
  • How often do I want to move? If you plan to live in a home less than 2-3 years, then purchasing a home may not be worth the investment. Keep in mind there are costs to buy and sell a home. Purchasing requires closing costs and a down payment, but selling also requires some fees as well – attorney fees, realtor commission, transfer tax, etc.  If you aren’t sure you can commit to a home for at least 2 years, renting and building your savings account might be a better option.
  • Do I need to be able to make it my own and renovate? If you want to change appliances, tear down walls, update flooring, etc. you are better off buying than renting. Unless you have an amazing landlord, who doesn’t mind you making big changes, owning your own home will give you creative freedom to make any changes you want.
  • Do I mind doing maintenance? If you’ve been a long-time renter, the thought of fixing a blown hot water heater or mowing the lawn might not be appealing to you. Maintaining your own home can be eye-opening for some people who don’t realize how expensive it can be. Especially if you have to do any major updates or repairs. When you own your own home, you’ll be responsible for everything from shoveling snow to repairing or replacing your roof. Be prepared to spend both time and money keeping your home maintained.
  • Am I ok with a fluctuating market? Real estate prices, like stocks, goes up and down. While the market is hot right now in Northwest CT, it won’t stay that way forever. Although real estate is considered a good investment in the United States, house prices do go down sometimes. If you aren’t comfortable dealing with a fluctuating market, renting may give you more peace of mind.

Choosing the right housing option is a very personal choice that takes some thought and reflection – and of course planning. If you are hesitant to make a big purchase or don’t have the funds to do so, then continuing to rent is a great option. If you want to start gaining equity in your own home, have the funds to get a mortgage, and don’t mind the maintenance involved, it may be time to purchase your own home. If you have questions, our team of mortgage lenders can help – CLICK HERE FOR MORE INFO.


Jennifer Ives-Groebl
Vice President, Senior Mortgage Lender
NMLS MLO ID: 532621

Author: Jennifer Ives-Groebl

Jennifer has been with Litchfield Bancorp since 1994 and was promoted to Assistant Vice President and Senior Mortgage Originator shortly after graduating the Connecticut School of Finance & Management in 1998. Stationed in both our Torrington and Litchfield locations, Jennifer is well known and respected in the local residential real estate community and recognized as a resource for some of the more difficult transactions. Jennifer resides in Torrington and is actively involved in the local community. She is a long time member of the Torrington/Winsted Rotary club and is currently serving as its Assistant Treasurer. Jennifer is involved with Litchfield County Board of Realtors and serves as chair of the Audit Committee and a member of the Public Relations Committee. She is also a member of the Fuessenich Park Partnership; and through Education Connection, has participated in the Mentoring Program.