One big dream for a newlywed couple is to set up home as a symbolic gesture of the beginning of a life together.
Of all the choices a couple has to make, choosing the place to call home is one of the most crucial ones.
Numerous factors ought to be considered before a choice can be made on whether to build, buy or rent a place.
The best option is to build a home as there will be an opportunity to customize it to the couple’s ideal of their dream home.
With this choice, all that is required is to envision the perfect house, find a reputable builder that can handle the project and make sure there is appropriate funding available.
However, if building a property is not a feasible option, newlyweds can choose between renting and buying.
There are various advantages and disadvantages for each of these options, and they serve as a basis for which a couple can make the monumental decision of choosing their home.
These pros and cons are;
Flexibility of movement
As a new couple, just starting their lives together, there is a high possibility that there will be incidences of relocating from one place to another before finally settling down.
Therefore, it is essential to account for these unpredictable changes when choosing the best option of which home to select.
If you are likely to move in a few years, leasing an apartment is more suitable as you can easily break a lease contract.
It will be much harder to sell off a house, especially one bought with a loan as there will be a lot of more detailed processes to go through.
If you have already planned out the course of your life with the certainty staying in one place, it would be best to purchase a house as the total cost of rent will eventually surpass the cost of buying a home after 2 to 5 years.
Income and financial status
Getting married usually involves the coming together of all aspects of the two individual’s lives, including their finances.
Therefore, the monthly and annual income, loans, repayments schedule and expenditure of the couple should be taken into account before making this decision.
Renting a space is suitable for a couple who are not able to afford a down payment on a house, monthly mortgage payments, insurance fees and taxes that are all crucial components of owning your own home.
Availability of credit facilities
If an outright purchase is not affordable, credit facilities are in place to aid couples to get a home loan.
It is ideal to have a down payment which usually amounts to at least 20% of the closing cost of the house, although some institutions allow lesser percentages.
Lending companies determine the eligibility for a loan and interest rates by reviewing the credit score and the number of loans that are currently being repaid.
However, if you have a less than ideal credit history which makes it hard to get a loan with reasonable interest rates, it might be best to rent while working on achieving a good credit score.
As a renter, the responsibility of repairs and maintenance to the house are not yours. After payment of rent, security deposit and other necessary fees, any damage to the property that is not caused directly by the renter is the landlord’s liability.
However, as homeowners, all damages and repairs will be paid for by you. The responsibility of hiring contractors and purchasing equipment will fall on you as a couple.
Owning a house is a good investment that can result in a substantial amount of wealth in the long run.
The value of real estate has been on an upward trajectory for a long time. Equity can also be built up after making substantial payments on the mortgage.
Unless you go with a rent-to-buy option in which the amount paid for rent is calculated as part of the cost of the home, renting does not provide any source of future income or wealth.
Purchasing a house allows you to deduct the interest on your mortgage payments and property taxes from your monthly tax payments. However, rent does not accrue any deductions from tax payments.
Building up a credit history
Prompt payment of mortgage can help to improve the credit score and provide a sound basis for favourable evaluation of your credit history. Rent might not afford you this benefit even if it is being paid regularly.