Buy or rent? Four Questions That Might Help You Decide
Buy or rent? It’s one of the biggest financial decisions in a consumer’s lifetime.
Can you afford it?
Having money for a down payment is difficult enough, especially with the high prices in Hawaii. Prospective homebuyers must also be able to pay other expenses associated with homeownership. In addition to the mortgage payment, there are utilities, maintenance, furnishings, taxes, insurance and the unavoidable things that need to be repaired or replaced such as a garbage disposal or water heater.
Are you confident about your future income?
If you’re renting and your income declines, it’s relatively easy to adjust your standard of living and perhaps move to a smaller apartment to lower your expenses. However, if you’re a homeowner, it will be more difficult to reduce expenses and if you can’t pay your mortgage, you face the real prospect of having your home foreclosed and your credit ruined.
So before taking the plunge, be honest with yourself regarding your future income. Is your industry healthy and growing? If you earn commissions or bonuses, how realistic are your expectations that you will continue to earn them at the expected levels?
If you lost your job now, how difficult would it be to find another one and would it pay you more, or less? The more confident you are about your future earnings, the easier it will be to make the decision to take on a mortgage.
Are you financially secure?
To be in a good financial position to buy a home, you’ll need:
* Good credit perfection isn’t necessary, but be aware that better credit history will lower your borrowing costs (that is, your monthly mortgage payment).
* Stable income
* Moderate expenses
* Cash reserves ideally to cover 3 to 6 months of expenses
* Sufficient cash to pay for closing costs and down payment
If you don’t have any of the above or if buying will deplete your entire savings, perhaps renting is your best option right now.
Does homeownership fit in with your other financial and personal goals?
Housing experts generally agree that a homebuyer needs to stay in his or her home for at least 4 to 5 years to offset the cost of purchasing a home.
How does the idea of setting down roots fit in with your career plans? Will your job take you to different places? Think carefully about how the purchase of a home might affect your other goals.
Visit any Aloha Pacific Federal Credit Union branch or call 531-3711 for a free consultation to find out if homeownership is right for you.
When You’re Ready, Aloha Pacific FCU is Ready to Help
Aloha Pacific Federal Credit Union offers numerous mortgage loan advantages, including low rates, low fees, personalized service and quicker closings.
Because APFCU is a full-service mortgage lender that also can offer local servicing through its affiliate, CUSO of Hawaii
Services LLC, borrowers have a wide range of loan products at competitive rates with the convenience of local servicing.
APFCU also offers a special program that can partner the homebuyer with its Realty affiliate, CUSO Hawaii Properties LLC, which provides professional realty service and special discounts to members.
Call 531-3711 or visit any branch of APFCU for all the details.
Membership ($100 in Regular Savings) required. Loans are subject to approval and may change at any time. Some restrictions may apply. Contact an employee for applicable fees and terms. Hawaii NMLS# 377314