Confused Whether to Continue Living on Rent or Buy A House?
Jun 28, 2017 Home Trading Steps
As soon as we get a decent job most of us keep hearing from our relatives and friends to buy a house. Some of us fall into the peer pressure and take the decision of buying a house without giving much thought and only assuming that they will have to pay the loan EMI for coming years but at least owning a house will give them stability.
We discuss the reasons why you should continue to live on rent:
1. New job:
Even if you have landed a new job which pays much more than the previous one, we advise you to not jump immediately to buying the house. Loan lenders see your credit history before considering you to give you a loan. An unstable employment history may be a warning bell to them. It is better to wait for two years after starting a new job before you apply for a home loan.
2. Not enough savings:
Banks generally give you the loan of almost 80 percent the cost of the property. Rest 20 percent the buyer has to pay from their own pocket. If you don’t have enough savings to pay for the said 20 percent, then it is better to wait till you have gathered enough. Rushing to buy a house without the savings may turn out a bad idea in the future. it is better to stay on the rent till then.
3. Too many bills:
If you already have too many expenses like credit card bills, car loan or any other personal loan, then it is better to clear them off before you buy a house. The home loans are expensive as compared to car loans and other loans and they don’t take too long to pay off. If you have to pay the home loan as well along with other loans, then it may disrupt your financial balance. Existing EMIs may also turn away to the lender from approving your loan.
4. Be mentally ready:
When you buy a home, its maintenance is your responsibility. And properties demand constant maintenance. Its décor also falls on you which is equally expensive as buying a house. When you live in a rented property, it is the owner’s job to keep the house maintained. Also if you buy a property far away from your workplace, then your monthly travel expenses might go up. Whereas if you rent a property near your workplace, then your travel expenses will be less which will help in saving a lot of money.
5. Think about why you are buying the property:
Make sure why you are buying a property. Is it an investment or you want it for your personal use. If it is for personal use, then remember you will not sell it off in any near future. While if it is for the sole purpose of investment then it is better to invest in plots or smaller properties, that can yield considerable amount if future.
We discuss the reasons why you should continue to live on rent:
1. New job:
Even if you have landed a new job which pays much more than the previous one, we advise you to not jump immediately to buying the house. Loan lenders see your credit history before considering you to give you a loan. An unstable employment history may be a warning bell to them. It is better to wait for two years after starting a new job before you apply for a home loan.
2. Not enough savings:
Banks generally give you the loan of almost 80 percent the cost of the property. Rest 20 percent the buyer has to pay from their own pocket. If you don’t have enough savings to pay for the said 20 percent, then it is better to wait till you have gathered enough. Rushing to buy a house without the savings may turn out a bad idea in the future. it is better to stay on the rent till then.
3. Too many bills:
If you already have too many expenses like credit card bills, car loan or any other personal loan, then it is better to clear them off before you buy a house. The home loans are expensive as compared to car loans and other loans and they don’t take too long to pay off. If you have to pay the home loan as well along with other loans, then it may disrupt your financial balance. Existing EMIs may also turn away to the lender from approving your loan.
4. Be mentally ready:
When you buy a home, its maintenance is your responsibility. And properties demand constant maintenance. Its décor also falls on you which is equally expensive as buying a house. When you live in a rented property, it is the owner’s job to keep the house maintained. Also if you buy a property far away from your workplace, then your monthly travel expenses might go up. Whereas if you rent a property near your workplace, then your travel expenses will be less which will help in saving a lot of money.
5. Think about why you are buying the property:
Make sure why you are buying a property. Is it an investment or you want it for your personal use. If it is for personal use, then remember you will not sell it off in any near future. While if it is for the sole purpose of investment then it is better to invest in plots or smaller properties, that can yield considerable amount if future.
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