Renting vs. Buying – weighing the options

It’s the start of a new year, which means now is a great time to evaluate your current living arrangements. Maybe you’ve been considering making a purchase on a new home for your growing family or even building that dream house. Tami Randolph, Mortgage Loan Officer with FirstCapital Bank of Texas, explains a few key concepts to consider before making any big home-buying decisions.

Pros and Cons of Renting

When renting an apartment or house, the renter pays the landlord a certain amount each month. Therefore, the landlord is responsible for paying the mortgage, insurance and taxes on the property, plus any maintenance. At most, renters typically will sign a 12-month lease agreement. Many renters feel a sense of psychological freedom, because they’re not locked to a 30-year commitment to pay back a home loan. On the flip side of the coin, renting can seem temporary and may not be the most adequate means to establishing a household. Furthermore, renting can limit customization to the home and often times restricts painting interior walls and even pet ownership. So although there are many ways to decorate and make a house feel like home, renters are bound by certain limitations imposed by the landlord. Contrary to popular belief, owning may be a cheaper alternative than renting. Even when factoring in taxes and insurance, a mortgage payment may in fact be less than what a landlord charges for rent. Additionally, homeownership currently comes with tax benefits. While the future of the mortgage interest deduction remains contingent on the homeowner’s loan balance, real estate taxes are still fully tax deductible.

So you want to build – now what?

Depending on your current financial profile, another option to consider is building a home specific to your family’s wants and needs. In most cases the homebuyer works directly with a builder to handle the overall construction and an architect to design the home according to the homeowner’s specifications. Selecting the right builder is essential to keeping a new construction project on time and within budget. Due diligence in researching your builder’s reputation before signing a contract is recommended. A key piece of advice is to never compromise on quality. Often times, builders use the analogy of entering into a temporary “marriage”with their clients. Homeowners can expect to work closely with their builders on each step of the project for thenext six-plus months, depending on the size of the home. Be prepared to make a number of decisions regarding colors, appliances, light fixtures and much more.

Keys to Qualifying for a Mortgage

Mortgage applicants will need a history of good credit. Being able to show a steady source of income is also important for loan consideration. It’s recommended to have a down-payment figure already in mind that you’re comfortable with putting towards a home purchase. Talking to a reputable mortgage lender first will help to determine a working budget that will then justify what kind of home is affordable. There are a number of ways to go about financing a new home. To learn more about various financing options, FirstCapital Bank of Texas offers easy and straightforward information onlineabout different mortgage programs at FCBTexas.com/mortgage.

About FirstCapital Bank of Texas

With headquarters in Midland, Texas, FirstCapital opened its doors for business on Nov. 17, 1998. FirstCapital is a locally owned and managed, independent community bank serving predominantly the people of West Texas, the Texas Panhandle and the Texas Hill Country with offices in Amarillo, Horseshoe Bay, Lubbock, Marble Falls and Midland. FirstCapital Bank is committed to placing “You above all,” which means we place the well-being of our customers, team members and community above all else. We are here to help you achieve your financial, business and life goals and have the highest quality products and services to help you do just that. Member FDIC.