Posted by: Larry Stevens | March 6, 2012

First Time Home Buyers vs Lifelong Renters

In an article we published with a fun infographic on rent vs. buy, we talked about the current housing prices, interest rates and tax breaks when it comes to buying a house. But not every renter wants to become a first time home buyer. We get that. Sometimes you just want to have a property management team take care of your lawn and snow removal. Of course it also means you probably won’t see the first time home buyer tax benefits you’d see if you bought a home. But again, to each his own as the cliché goes.

In all seriousness though, there are several benefits to buying your first home instead of staying in a rental all your life. Rent increases every year for most people in apartments and rental houses. It’s up to the landlord, and research shows an ever-increasing rental average. Mortgage payments only change (on a fixed-rate home mortgage loan) if your property taxes change. Your principal and interest stays the same.

Deposits: Sometimes it’s damage you left behind, other times it’s a landlord simply keeping your money. But that security deposit you paid may not come back to your account. Sometime the costs of renting start small and add up to a lot of money.

Yes, renting is great when you’re not planning on staying in an area very long. But planning to live in a rental forever isn’t exactly the best decision for many of us. So how do you get on the track to becoming a 2012 first time home buyer? It all starts with your credit score. Understanding where you FICO score is and how to bump it up as high as you can is really the best place to start.

Finding out your credit score is as easy as meeting with a consultant to get a mortgage pre-approval. The pre-approval helps ensure that you can afford the home you’re considering, and lets the real estate agent know that you’re a serious buyer. It also lets you know as the buyer where you stand with your credit score, down payment amount and other mortgage loan subjects.

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