Let’s face it, navigating today’s North Carolina housing market can be daunting, like trying to complete a 1,000-piece puzzle in the dark. Prices are up. Interest rates are a roller coaster. And everyone, from your neighbor to the barista who has your order memorized, has an opinion.

But here’s the truth. For most people, buying a home is probably the most expensive thing they’ll ever buy. But purchasing a house is not your only option. Each year, more and more North Carolinians opt to rent instead of buying their homes, for good reason.

So, what’s right for you, buying or renting?

Not sure? Let’s break it down.

Renting: The Pros and Pitfalls

If you move frequently for work or prefer not to handle repairs and maintenance for appliances and utilities, renting might be the right choice.

Pros:

• Lower upfront costs, often just the first month’s rent plus a deposit equal to one month’s rent.
• The money you save can be put toward other investments..
• The landlord is responsible for repairs such as plumbing and electrical issues.
• You’re not tied down to a property if you decide to move or change jobs.

Cons:

• You won’t build equity, ever.
• No tax advantages.
• Rent can rise unexpectedly.
• Your landlord could sell the property, then, surprise, you have to move.

Buying a Home: The Pros and What to Keep in Mind

If you want to buy a home, your priorities are probably different than those looking to rent. For example, you may be ready to settle in North Carolina’s Piedmont Triad or coastal shoreline and don’t foresee moving or switching jobs anytime soon.

Buying might also be the right option to build your financial portfolio and creditworthiness.

Pros:

• Mortgage interest and property taxes are deductible.
• As you pay the loan principal, you will build equity, a.k.a., your future.
• Overall, most home values increase over time, which boosts the amount of equity and your return on investment when you sell your house.
• One day, it’s all yours, no more monthly payments.

Other Considerations (Not Necessarily Cons)

• You’ll need a down payment.
• Closing costs, insurance and taxes add up.
• Monthly utilities and ongoing maintenance.
• Ongoing home repairs, like when your water heater goes kaput.

It’s essential to do what’s best for you and your finances. Before deciding, research your options and talk to one of our PACU loan officers today.

Decision Made. You’re Buying. What Now?

Before mapping out your furniture placement or picking out paint swatches, let’s talk budget. Falling in love with a home you can’t afford can quickly become a financial nightmare, and not just one you can end by cutting off the TV.

Many experts recommend limiting your monthly house payments, including home insurance and North Carolina property taxes, which can take 25% to 28% of your take-home pay.

Need help running the numbers? Try out our online home-loan calculator. Or better yet, talk to our loan officers. They’ll walk you through the process with no pressure.

And remember to look beyond mortgage payments because the more you spend on a house, the less you will have for other things. Would this mortgage payment fit your budget, considering your other responsibilities such as student loans, car loans, childcare and other expenses like appliances and groceries?

Bottom Line: Home Should Feel Right

Renting or buying is more than a financial decision. It’s a lifestyle one, too. From dreaming of a fixer-upper bungalow or loving that spacious downtown apartment with a killer view, make the choice that fits your budget, goals and life.

If you do decide to buy, we’re here to help every step of the way.