Things you should know when moving from a renter to a homeowner
Moving from a renter to a homeowner is a big step in life. I still remember the day we signed those papers that allowed us to quit writing checks to a landlord and start writing checks to a mortgage company. It was a big, big day.
One thing I learned very quickly was that owning a home brings with it both rewards and challenges. As a renter you simply make your monthly payment, get insurance on your personal property and let the landlord do the rest. As a homeowner, you’re now responsible for even the smallest details – repair, lawn care, insurance, utilities...everything. While it’s exciting, it’s still a HUGE responsibility. Before you move into the buying phase, I think it’s always a good idea to check out a “should I rent or buy” calculator; Yahoo! Real Estate and Bankrate.com both offer good ones.
Since a lot of people we move are transitioning from being a renter to a homeowner, we hope this information and advice proves helpful – here are some things you can expect from homeownership:
Your mortgage payment almost always includes more than just the actual house payment. You can expect to pay for a down payment, closing costs, interest charges, property taxes, utilities, renovations, maintenance, and homeowners insurance. Normally these can be bundled in with your mortgage payment.
If you don’t pay at least 20% down, you’ll have to pay for it. Most likely, if you don’t have a 20% down payment, your mortgage lender will require private mortgage insurance (PMI), to protect themselves if you default on the loan.
Mortgage interest is almost always tax deductible. While I won’t go into the requirements here, this Investopedia article does a great job of explaining it.
Your payment means equity. This is a “feel good” reminder! The mortgage payment you make each month ultimately goes toward the mortgage balance (at least partially when you consider interest). That means that you’re building equity rather than endless rent payments with no future gain.
Renting may be better if you’re not planning to live in the home long. If you have to sell (let’s say you transfer with your job), the experts say your property would need to appreciate at least 10% to cover the cost of selling. That means you typically need to stay in a home at least three to five years to recoup your costs.
We hope this helps with your big decision! It’s exciting and challenging either way!
Now, whether you decide to buy or rent, U-Pack would love to move you to your new home. Call us today for a free moving quote!