We asked two local experts to weigh in on this great debate. They say there are pros and cons to both and offer tips to help you decide what’s right for you. Pedro Ramirez (left) is the mortgage development and originator at Centennial Bank, and Shamim Okolloh (right) is vice president and community outreach officer at Encore Bank
BENEFITS TO OWNING
“Homeownership is one of the best vehicles for building wealth, as homes are an asset that, over time, tend to increase in value, creating equity,” Shamim said.
“When you own your own home, you’re on your way to building equity and wealth the same way generations of people before us have,”
“The difference is that paying for a home has the magic word we all love: equity,” Shamim said. “When you pay rent, you do not receive any proceeds when you move out. But if you own a home, pay the mortgage and decide to sell it in seven years, you are likely to make a profit.”
REASONS TO RENT
“When you rent, you are not responsible for lawn care, maintenance, repairs and acts of nature you just can’t control,” Pedro said. “When you buy a home, you need to know you are taking on all these responsibilities, and some hidden
“Benefits of renting include having time to build up your savings and work towards being lender-ready (increasing your credit score) and not being tied down to a geographic region,”
“If you move around a lot or travel often — if you’re not going to be home regularly to enjoy your house and do the required maintenance — you may want to hold off until you have more time [to] dedicate to your home,” Pedro said.
MORE QUESTIONS ANSWERED
Q. Does my credit score affect whether I can buy or not?
A. “Yes, but not just your credit score. Credit score, credit history and credit availability all affect if and how much you can buy/[get a home loan/mortgage for]. The lower of all of these, the higher your interest rate and vice versa.” —Pedro
Q. How do I know if I’m ready to buy?
A. “There are a few factors to consider: personal goals, gathering emergency funds, improving your credit score, gaining knowledge and building a trusted team—especially with a lender and real estate agent. [Are you prepared for] other immediate costs, such as down payment, closing costs, home inspection fee and the appraisal fee?” —Shamim