Is It Better to Buy or Rent?

By Arkansas Next on Thursday, March 31, 2022

Timothy D. Thomas, a real estate loan officer for First Arkansas Bank & Trust (FAB&T) in Conway, breaks down the current housing situation.

What are some benefits to buying a home versus renting and vice versa?
“Buying a home is a big decision, but there are plenty of benefits that come with buying, such as... you’re likely building equity that can be accessible in the future. There are also benefits to renting such as renters may not be responsible for repairs and maintenance, and rent is usually cheaper than mortgage payments.”

What are the financial differences in paying for a home, rather than renting an apartment?
“The biggest financial difference between owning a home as opposed to renting an apartment is that renters do not have the opportunity to make a long-term investment in their property, which will appreciate over time and increase their net worth.”

How do I know if I’m ready to buy?
“If your financial house is in order, such as low debt, good credit, having enough money saved for a down payment (3-20% of sale price) and the ability to afford the payment, you may be ready to take the leap in homeownership.”

In what situations is it best to rent?
“It may be best to rent if your financial house isn’t in order. Renting will allow time for you to possibly build your credit, lower your debt and save enough for a down payment.”

Does my credit score affect whether I can buy or rent?
“Yes, a credit score can affect both buying and renting. A low credit score may give banks and property managers the impression that you can’t pay back debts as agreed upon.”