If you’re thinking about buying your first home, chances are you’re renting now. And you might be wondering whether you’re better off buying a home or continuing to rent.

The truth is there are advantages and downsides to both buying and renting depending on your circumstances. For example, renting might be better if you have a fast track career and have to move every couple of years. On the other hand, your landlord can raise your rent every year when your lease is up. Buying has the advantage of building equity and improving your credit score, but it also means paying taxes and homeowner’s insurance, and of course you’re responsible for maintenance.

To help decide if this is a good time to buy your first home, ask yourself these four questions:

1. Will you be living there for at least five years? There are costs that come with your home purchase, including a down payment and closing costs. And it usually takes time to recover those costs because you don’t build much equity in the first few years of your mortgage. If you’re able to remain in your new home for five years or more, buying is a good option.

2. How much will you have to pay upfront? There are upfront costs that come with both buying and renting. If you rent, you’ll typically need to come up with first and last month’s rent and a security deposit. If you buy, you’ll need to make a down payment, usually up to 20% of the purchase value, and you’ll have to pay closing costs, which typically run from 2 to 5% of the home’s value. Before you make your decision, calculate all of your upfront costs to see which option is more affordable for you.

3. Is your credit strong enough to secure an affordable mortgage? There are many options for financing a new home, including some offered by the government to help first time home buyers. In general, however, you should have a solid credit score (figure at least 620) to qualify for a mortgage and get a good interest rate on your loan. And lenders will probably also want to check factors like your debt-to-income ratio and salary before approving you for a loan. Before you decide to buy, find out what your credit score is and what mortgage options you have.

4. What are your personal preferences? First-time home buyers are sometimes overjoyed at the prospect of ownership, right up until the time the roof starts to leak or the plumbing goes bad. Home ownership carries new responsibilities that aren’t for everyone. Before you decide to buy, decide whether you’re willing to make the commitment to stay in your home and maintain it properly.

Buying a first home can be one of the most joyous events in your life. But it can also be one of the worst if you don’t do your homework and think about every aspect of ownership. Your best bet is to work with an experienced real estate agent who can walk you through the process and help you make this important decision.

Are you looking for a new home in the San Joaquin Valley or Bakersfield? SJV Homes now has open for sale 10 communities with a combined 845 single-family homes. If you would like more information, sign up for our interest list here.

Lisa Walker

What Homeowner’s Insurance Doesn’t Cover: You Might be Surprised All 95 Homes at San Marino, Northwest Visalia’s Most Popular New Neighborhood, Have Sold