When learning about houses and the housing market, there is so much to know, from what to do when buying a home to knowing what to do to prepare for a home inspector. To ensure you don’t overload your brain with more information than you can handle, take in a little information at a time. For instance, looking at renting or HUD info is a great place to start. Breaking down these issues, we will look at home buying vs renting a home.
What is the HUD?
The HUD, or the United States Department of Housing and Urban Development, is a big part of the housing industry it’s a part of the U.S. federal government. As a department in the Executive branch, the HUD consists of a variety of programs to help provide the best housing possible for those who may need assistance. The goal of the US Department of Housing and Urban Development is to get rid of discrimination and create communities of strength and connection.
Some of the programs within the HUD are as follows:
*The Indian Housing Program
*The Single Family Housing Program
*the Multifamily Housing Program
*The Public Housing Program
HUD is a very helpful department in the US government. It helps provide a great place for people to rent houses. Renting houses is a tricky thing, and sometimes people have a hard time deciding if it’s better than buying a house or not. With every situation being so different, it’s hard to tell in generalities. To know what you would need to look at in order to know if renting or buying would be better for you, check out the following list of pros of renting a house over buying one:
*Since the house isn’t yours, you don’t have to pay to keep it up. If something breaks and needs repair, you can contact your landlord and he/she will take care of it.
*Property tax isn’t a problem for you. Since the house you are living in isn’t your own property, your landlord will be the one paying the property tax, as well as utilities sometimes (depending on your agreement).
*When you rent, you typically get more space for the amount you are paying for. You can afford a bigger place in the short-term if you rent a house over buying one.
*You aren’t tied down. If you are renting, you don’t need to feel stuck in one place. Depending on your contract, you could move away whenever you want because you wouldn’t have to worry about selling the house.
*If you are wanting to save money in the short-term, renting is the way to go because it typically takes about twenty years to start saving money on a home that you have bought.
*A lot of money goes into buying a house from the get-go. You will need to put down a down payment and cover a lot of different upfront costs. There aren’t as many costs when renting a house; you typically only need to make deposits and maybe the first month’s rent.
Now that we’ve looked at some pros of renting a house, let’s look at some pros of buying one:
*You build up equity when you buy a house. The majority of the time when you own a house, you pay your mortgage and part of that money you pay goes towards your loan’s interest on the house. The rest of the money goes into the home loan’s principal. All of this money going towards your home loan is going towards your home’s equity, which is giving you ownership of the property. Once this hits 20%, you can start refinancing your mortgage or take out a loan. When refinancing, you can take longer to pay and with a lower interest rate to boot.
*Buying a house can become a financial investment. Whether you want to rent out all of your place or only part of it, and whether you want to do it right away or in the far-off future, you can offset your mortgage and taxes by renting part of your property out.
*Tax benefits galore! When you own a home, you get tax benefits. Depending on your individual situation, you can get different tax exemptions and other benefits. Two of the most sought after benefits are the Homestead Exemption and the Federal Tax Deduction.
*When you own a home, you have the creative freedom to do what you want with the house. You can paint the walls every color and add whatever you want—including a bathroom or bonus room. When you buy a house, you can let your creativity shine.
From the list above, you can see that there are pros to both buying a house and renting one, but depending on your individual situation, you will have to determine what is best for you. If you are looking more towards saving money in the immediate future or don’t have the money to put a down payment down on a house, then renting a house is probably best for you. If you can afford saving up your money and taking your time, and if you want to save money in the grand scheme of things over time, buying a house would be best.
There is so much to learn about the housing market, but starting with learning about HUD or renting a home is a great place to begin.