Are you interested in buying a property but are wondering if you can afford it? – We have created a guide to determine if you as a First Time Buyer in Derby should consider buying a home or are better off renting.
Instead of just jumping to conclusions on which option is best, you should think through both the pros and cons of both options and then see which option is fitting for your situation.
Each individual has a different lifestyle and personal homebuying goals which is why it’s good to look at both sides of the coin. You will never truly know which one is the most appropriate one until you have a look into the differences of each choice and if it benefits your situation.
In many cases, existing homeowners that you may know may encourage you to invest in property sooner rather than later because they have already weighed up the pros and cons.
When it comes to monthly mortgage payments, it’s very common for homeowners to be paying less than if they were to rent. The Bank of England’s interest rates may change from time to time, so your mortgage payments could change and go up.
There are solutions to this such as securing a fixed-rate mortgage which means your payments will remain the same throughout your term.
In the case where you do rent, your payments might also change. This could be due to maintenance costs and Buy to Let Mortgage interest rate which results in your landlord increasing your rent.
One of the reasons why people purchase property could be to create a more stable situation for themselves and their families. With a rented property, the landlord has control and can revoke the tenancy meaning you could be at risk of having to find somewhere else to live within a short period of time. On the flip side, a person who owns their property will have more security because no one can force them out.
A tenant may have access to some forms of protection where a tenant can be covered for certain things like the amount of notice a landlord needs to offer a tenant, however, if the tenant wishes to reside for longer there isn’t much they can do to change the landlord’s decisions. Overall this can have a large impact if the tenant has a steady job in the local area.
You may find that some landlords are able to offer their tenants first refusal to provide them with the opportunity to purchase the property which can save landlords on Estate Agent Fees.
When it comes to renting, there is a lot more flexibility compared to owning. A tenant has more freedom to give their landlord notice if they have found a better offer that they want to go for like a better job in a different area. This versatility is not something you get in homeowning. With this situation, the decision will come to whether the homeowner will want to rent out the home or sell it. This process of selling a home and buying a new one can be costly and time consuming.
If you are in a situation with your work and overall lifestyle that you feel will be temporary like you are planning to not stay at the same workplace and are looking at moving somewhere different in the future, then you should really think through buying as it is a large financial commitment to take on for a temporary situation.
Being a tenant means the landlords are responsible for any major repairs. Some Lettings Agents and landlords are better than others when it comes to repairs, however, some minor maintenance will be the tenants’ responsibility. For homeowners, it’s their responsibility for their property’s repairs and they are also in charge of insuring the property. Therefore, if this is forgotten, it could result in a disastrous situation for the homeowner.
Buying a property isn’t for everyone. For example, those who are moving out of their parent’s house may find that buying a home isn’t right for them currently and it will be a better financial option to rent while they can build up a sufficient financial profile for them to buy a property.
The reason why we want our customers to be 100% confident in taking on such a large financial commitment is that it can be challenging if you are looking to get removed from a mortgage. Therefore, you need to consider your options before diving in and you may find you would want to rent while you save up for a deposit.
If you are looking at the option to rent with a friend or family member, we do suggest that you look at renting first, as a Mortgage Broker in Derby. Renting is a brilliant opportunity if this is the option you to go for.
With buying, you are tied to a mortgage deal and will be financially linked with your family/friend(s) which can result in issues down the line when you want to move on and out of the property. This is something that isn’t as straightforward as just removing your name.
If you are in this situation, you will need to get Specialist Mortgage Advice in Derby to get this sorted out. Therefore if you are looking at renting or even purchasing with a friend(s) or family, you should speak to an expert advisor’s help to assist you along the way.
The property market is unpredictable and it can fluctuate unexpectedly. There could be a point where the market booms or crashes but you never know when it will happen. It’s brilliant news when you find out that your house will go up in value.
Unfortunately, this can go the other way and your property price can also go down in value. There is a risk of you losing a lot of money if you sell your home at the wrong time.
In most cases at our Mortgage Broker in Derby, we see that the majority of people would prefer to buy rather than rent. Whether a mortgage is being paid for or property is being rented monthly payments are still going towards living somewhere. The only difference is that if a person is buying then they are seeing their payments going towards their own benefit rather than someone else’s. The main factors ultimately make up the decision are timing and financial position.
Through our experience as a Mortgage Broker in Derby, we do find many people do choose to buy over went as they see this as an early opportunity to get themselves into the mortgage world. People also look at their payments as going towards something that will benefit them instead of someone else.
Last Edited: 31/10/2022