Perhaps the most worrying part of either purchasing a home or renting an apartment is the cost involved. It will likely govern your ultimate decision more than any other factor, and it certainly deserves a fair amount of contemplation.
Here, we’ll briefly overview the common costs associated with both renting a place to live and owning your own home.
Upfront, renting can certainly be more budget-friendly. Unlike when someone purchases a home, there are no large down payments to worry about. Usually, renters are only required to pay an application fee, security deposit, and a down payment (or any combination of the three). Different apartment buildings and landlords will have different requirements, so it’s important to research beforehand. For example, most apartments require an additional fee if you own a pet.
Aside from the recurring monthly rent, renters will usually have to pay utility costs and perhaps even renters insurance if their landlord requires it.
The cost of owning your own home is a bit less straightforward than renting. One thing that is certain, though: the cost of owning your home is going to go well beyond the initial asking price of the home itself.
Monthly payments on a purchased house may be lower than rental payments, but there are several other costs you will have to consider. They can include:
- Down payment costs
Lender or realtor fees
Private Mortgage Insurance
Many would-be homeowners have difficulty securing the funds for these extra expenses, especially down payment. It’s important to make sure your budget has enough room to accommodate.
If you’re still deciding on whether renting or buying is right for you, or you’re worried about putting together enough for a down payment, CNE can help. We provide homeownership counseling services as well as loan products and down payment assistance to help you get on the path to owning your own home. Call today to learn more: 423.756.6201.