Renting Vs Mortgaging
You’re considering your next move, whether for personal, family or career reasons. You know you can rent or buy a home, but you’re not sure how a monthly mortgage payment stacks up against a monthly rent payment. Sorting through those pros and cons requires fact-finding. It also requires being honest with yourself about future plans, your financial health and comfort zones.
At ICI Homes, we understand the conundrum. Here are five questions to ask about renting versus buying a new home.
Can You Qualify For a Mortgage?
Let’s assume you’re not a prospective buyer who’s liquid enough to pay cash for a new home. That means you’ll need a mortgage to buy a home. Qualifying for a mortgage means filling out loan application forms and providing
proof of your financial situation to the institution you’d like to use — a bank, credit union, trust company or mortgage loan company. Do this first. The majority of us can’t proceed with our buying-versus-renting decision until we know whether we can be approved for a mortgage.
Can You Put Up a Down Payment?
Let’s assume you’re pre-approved for a mortgage. Your next hurdle is the ability to pay a down payment — a percentage of your home’s total price — when you go through the closing process of formally signing all mortgage documentation. What remains of the total home price, after the down payment, is financed via your mortgage. The current industry-standard down payment is 20 percent of the cost of your home.
At ICI Homes, we understand the conundrum. Here are five questions to ask about renting versus buying a new home.
Can You Qualify For a Mortgage?
Let’s assume you’re not a prospective buyer who’s liquid enough to pay cash for a new home. That means you’ll need a mortgage to buy a home. Qualifying for a mortgage means filling out loan application forms and providing
proof of your financial situation to the institution you’d like to use — a bank, credit union, trust company or mortgage loan company. Do this first. The majority of us can’t proceed with our buying-versus-renting decision until we know whether we can be approved for a mortgage.
Can You Put Up a Down Payment?
Let’s assume you’re pre-approved for a mortgage. Your next hurdle is the ability to pay a down payment — a percentage of your home’s total price — when you go through the closing process of formally signing all mortgage documentation. What remains of the total home price, after the down payment, is financed via your mortgage. The current industry-standard down payment is 20 percent of the cost of your home.