What is better, to rent a house or buy it?
Undoubtedly, realty market has shown a fantastic time in the past and a promising future is there. Still, when there is time of slowdown, economic turmoil, and difficult financial decisions; there can be multiple consequences if the decision goes wrong. If the market flourishes, then there are multiple buyers. If it goes down, then there are more sellers and nobody takes interest in buying.
This is the very first step before one goes for final conclusion. Buying versus renting is a difficult question to answer. Everyone has to look into it from an individual perspective. Some people think that since there is high insecurity of job during economic turmoil, it isn’t a good thing to get trapped into home loan. A rented house gives more economic independence since there is no liability. One can go for cheaper option if there is a salary cut or change of job. Shifting to a cheaper place saves from recurring burden on expenditure. Home loan, on the other hand, is fixed and mandatory.
Moreover, thousands of applications get stuck with banks when economies shake. Some of them remain in pending state forever. Even if lenders offer loans, very limited resources process the cases. Therefore, a delay in processing is quite common. Prolonged slowdown adds fuel to the fire. Comparison has to be done on a long-term basis, not on a short-term. As difference between lending and renting costs become thinner with hype in mortgage rates, buying properties becomes lucrative. Experts suggest that it is always a wise thing to ask a few questions before going for a ‘buy’ decision.
Is it affordable?
Affordability is one of the top concerns while deciding about buying property. One has to stretch a little bit to get a reasonably good house. Hence, it is incredibly important to do necessary calculations about financial adjustments and lifestyle modifications. Make monthly budgets and curtail unnecessary expenses. Financial experts say that at least 30 percent of monthly income should be kept secured for monthly installments. Even if the EMI amount is less, it is good to keep that much amount aside. Sometimes banks or financial institutes allow excess payment. Since they deduct part of it from principle amount also, people save a few bucks in a long run.
Is the loan available readily?
Everyone should understand the basic rules of money lending, especially for home loans. Money-lenders follow a specific set of criteria to measure paying capacity. Consistency is one of the basic parameters. Credit rating and payment history are considered before sanctioning new loans. Chances of fast approval increase when the history is clean. Those who do not earn good salaries find difficult to get the loan sanctioned. However, they can use savings (if any) to reduce loan amount. Today, lenders take help of modern tools and credit history software and there is no scope for ambiguity/fraud.
Is the realtor best in the town?
If one finds a good realtor in the town, then that is the best thing. If not, then it is important to find the best by gathering information from all possible sources. A realtor with good credibility and clear performance not only suggests good properties, but helps in finding out suitable money-lender as well. Since realtors are in touch with all types of money-lenders, they can suggest one with high reliability. It is a fact, that finding a realtor or money-lender is tough during economic slowdown. However, only those who are efficient and sustainable survive through tough times. Hence, buyers can trust them without any doubt.
Accurate calculation is necessary for right decision
Experts say that it is extremely important to take all necessary parameters into consideration while calculating costs. Generally, people take only initial costs and forget hundreds of other hidden costs like maintenance, repairing cost, property tax, insurance cost, and many others. Inflation rates and appreciation or depreciation, etc are just to name a few. It is a fact, that economies take unexpected twists and assumptions become invalid many a times. Sometimes, face value is high but prospects of appreciation are good. It is a wise thing to invest in such property from a long-term perspective.
Purchasing properties during economic slowdown is not an easy thing. Great efforts are needed for narrowing down to a right decision. Some people prefer professional consultants who ask basic information and suggest the best properties in the town. It is a time-saving, but a little bit expensive solution.
Recent global slowdown has made a severe impact on the mindset of people worldwide. They think twice before making a bold move. Uncertainty and anxiety is everywhere. Financial institutions and funding agencies behave stringently regarding policies and procedures. In such a situation getting loans approved is a challenging task.
When recession strikes, nothing remains unaffected by it, even home prices. Rates of nicely located properties are always beyond reach; even mediocre ones also become unapproachable. However, spending a big part of salary on rent is not a wise solution either. People think about purchasing a decent house or flat instead. It is actually a good opportunity to buy the first ever property.