To rent or to buy? Here’s what to consider

This paid piece is sponsored by The First National Bank in Sioux Falls.

Signing a lease on an apartment is a big deal. Buying a home is an even bigger deal.

And if you’re not sure which direction is right for you, you’re in the right place.

First, it’s important to work through a decision like this with people who will take the time to get to know you and your situation.

At The First National Bank in Sioux Falls, that’s what you’ll find. It’s a local community bank, and the mortgage bankers want to learn about you as an individual. So if you’re currently renting and thinking about buying, not only are they ready to help, but you can start right here.

Should I rent or buy?

Ultimately, it’s your decision, and you should make it based on what’s best for you and your situation. One place to start might be the FNB renting vs. buying calculator.

No matter what you decide, the FNB team will be there for you every step of the way!

Here are some things to think about as you consider the question of “Should I rent or buy?”

Why rent

• More flexibility, less commitment, ability to relocate easier. When you rent, there’s no need to worry about selling your home.
• No property taxes. Homeowners must pay property taxes, but that’s not the case when you’re a renter.
• Little to no maintenance or repair costs. Most landlords handle maintenance work and costs.
• No shoveling snow or mowing the lawn. Some landlords take care of this, so you don’t have to worry about it!

Why buy

• Build equity. When you buy a home, your monthly mortgage payments are going toward something you own.
• Tax savings. You may deduct mortgage interest payments and property taxes from your federal income taxes. This may not apply to you or your situation, please contact a tax professional.
• Make your house a home by being able to paint, decorate and remodel.
• Remember: Maintenance and repair costs. When owning a home, the owner is responsible for all repair costs.

I want to buy a home eventually. How can I prepare?

• Start saving for a down payment early in the process. If you’re a first-time homebuyer, you may be able to take advantage of down payment assistance, tax credits and reduced private mortgage insurance premiums. Additionally, first-time homebuyers may qualify for a reduced down payment as low as 3 percent – a 5 percent down payment is typically required on a conventional loan.
• Get debts under control. Having a large amount of debt could reduce the loan amount you can qualify for when you’re ready to purchase your home. Check out First National’s podcast, Common Cents on the Prairie, to learn more about reaching your financial goals.
• Know your credit score. Your credit score can affect the interest rate you qualify for. Find out how you can get a free credit report in FNB’s quick links section.
• Take a homebuyer education course. The course will go through the homebuying process, budgeting, escrow and loan programs available in detail. Contact one of these lenders for information on available courses.

When should I meet with a banker?

The FNB mortgage lenders are available to discuss homebuying/financing options anytime. There is no right or wrong time to meet with a lender. Their goal is for customers to take time to ask questions and learn about the process.

If you decide you’d like to buy a home, contact one of the mortgage lenders at FNB right away to get pre-qualified. Pre-qualification is a quick snapshot of the loan amount you may qualify for.

Once you’re pre-qualified, you can refine your home search to what fits your budget. This is something your real estate agent will ask you to do before looking at homes, so it really should be step one.

First National offers a pre-qualification application on its website or you can learn more about the process by looking at the pre-qualification road map.

Contact the FNB mortgage team if you have any questions or to learn more about buying your home.