Renting Versus Buying, Are there Any Advantages to One Over the Other?

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Almost all adults eventually face the decision between renting and buying at least once in their lifetime, though many go through the process several times. It can be a confusing a difficult decision to make, because both sides offer their own distinct advantages and disadvantages. Today, we will lay out some of the pros and cons of renting and buying to help make it easier for you to figure out which option will better suit your specific situation, wants and needs.

Some of the disadvantages of renting in comparison to buying include:
House with For Sale Sign

When comparing buying to renting, there are a number of advantages, such as paying more for rent long-term without gaining any equity in the property.

Renting is More Expensive in the Long Run – The New York Times offers a free calculator that allows you to compare the cost of rent to the estimated mortgage and interest rate on a house to see how long it will take for buying to cost less than renting. In most cases, its as short as three to five years. Once you factor in rent increases, tax breaks and other things associated with each option, buying gradually becomes steadily cheaper with each year you own the home.

There is no Equity in Renting – Every time you make a payment toward your mortgage, you are building equity. In the event you decide to sell your home, the more you have paid off the more equity you have, and thus, the more money from the sale you get to keep. In contrast, between damage charges and cleaning fees, many renters actually owe money when they leave their rental properties behind.

Renting Offers no Price Stability – Rent costs rise steadily each year by roughly 5%, meaning that what you pay today to rent will be approximately 25% higher in five years, 50% higher in 10 and so on. If you stay in the same place for 20 years, you will be paying at least twice as much to occupy the same place as you paid when you first moved in. When you buy a house, your mortgage rate will pretty much stay the same for the entire term. Whether it’s 15 years or 30, what you pay today will be almost exactly the same as you will be paying decades from now.

Renting Offers Little Aesthetic Control – From the tile in the kitchen to the color on the walls, renting gives you little-to-no say in how your home looks. Landlords expect the property to look exactly the same the day you move out as it did the day you moved in, and even home improvements aren’t typically allowed. When you own your home, you can do pretty much as you please with it, so long as it complies with any HOA rules and local laws.

Rent Often Costs More and Gives You Less – If you compare the cost of rent to what most people pay for their mortgage, you will find that the mortgage is usually less each month. Most two bedroom apartments cost more to rent than owning a three or four bedroom home.

But of course, buying isn’t for everyone. In some cases, renting offers a more suitable solution:
House with For Sale Sign

There are some advantages to renting over purchasing, including being tied down for longer and having more upfront out-of-pocket expenses.

Buying Ties You Down More Than Renting – If you aren’t sure you want to live in the same place for more than a few years, buying may not seem like a feasible option. If you don’t want to deal with selling a home or staying put until the house is paid off, renting provides more freedom as you can leave as soon as your lease is up. However, many homeowners choose to turn owning a home into an entrepreneurship opportunity, and rent out their homes for profit as an alternative to selling. You could buy your home and move virtually anywhere else in the world you want while collecting rent on your house.

Buying Costs More Upfront (Usually) – Some people choose to rent because they can’t afford or are saving up for a down payment toward a house. Some lenders require as much as 20% of the home value upfront before they will loan the rest. However, it is important to note that LGI Homes offers a no money down option, which can help you buy the home of your dreams for less up front than a security deposit and first and last months’ rent on an apartment.

Buying Requires You to do the Maintenance – When you own your home, there are no maintenance men to call or gardners to do the landscaping, unless you hire them that is. Longtime renters are used to the convenience of having sinks fixed for free and neatly trimmed landscaping that they don’t have to worry about, but when you own, these things are your responsibility. However, if you love yard work and you’re a home improvement saavy person, you may enjoy having the opportunity to do the upkeep on a house you own.

How to Prepare Yourself for Homeownership

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Homeownership is a major milestone many people look forward to in their lives, and few material possessions can compare to the feeling buying your first home brings. However, just about any professional in the real estate business will tell you the buying process can be confusing for first-timers, and many are unsure if they are really ready to take the plunge. These tips will help you decide if you are ready to buy and prepare you for owning your first home.

What to Expect when Buying a Home

If you intend on buying a home, you may want to prepare yourself for all the joys and challenges of homeownership.

Review Your Credit – To gain a clear picture of your financial situation, order and review a copy of your credit report. If possible, try to get a copy with entries from all three major credit reporting agencies (you can get a free copy once per year). Look over your credit report to make sure everything is accurate and that there are no discrepancies, and if there are, be sure to report them immediately so that they can be cleared and resolved by the time you start browsing homes. You don’t want any surprises making an untimely entrance into your life, and reviewing your credit can ensure that the information you present to potential lenders is an accurate representation of your credit history.

Minimize Your Debt – When a lender goes over your income, assets and expenses, they will often take your debt-to-income ratio into consideration. Before you even attend your first open house or think about applying for pre-approval, focus your energy into paying off as much debt as possible. Start with your smallest debts and work your way up. The simple act of paying off a few hundred dollars in credit card fees or the remaining balance on your auto loan can make you more attractive to lenders and increase your odds of approval.

Start Saving – The more money you can afford to put down on your house, the less money you have to borrow and the lower your monthly mortgage payments will be. Some lenders do not require a down payment, others may require 10-20%. Cut back on unnecessary expenses and bank as much possible toward a down payment.

Figure Out How Much You Can Afford – Visit potential lenders and have a sit-down to discuss mortgage prequalification. Have the lender run your income, assets and debt to give you an estimate of how much money you can realistically afford to spend on a new home. Mortgage pre-qualification will help you figure out if you are really ready for homeownership and will assist you in the early stages of your buying experience as you look at potential homes.

Consider Your Financing Options – Research different programs you might be eligible for and shop around different lenders. The way you finance your first home can be the difference between living comfortably each month or living paycheck to paycheck. Educate yourself in different interest rates and fees to find the most affordable financing available within your budget.

Get Pre-Approved – Using the figure that you came up with during mortgage pre-qualification, apply for pre-approval through the lender of your choice. Pre-approval is attractive to sellers because it assures them you have the funds to back up your offer.

LGI Homes and Handicap Accessibility

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Here at LGI Homes, we understand that all of our residents are unique and that everyone in our communities have their own distinct personalities and needs. That is why we strive to build homes that cater to everyone, so that all potential buyers who visit our offices can leave having fallen in love with a particular floor plan. This includes residents who either have disabilities themselves or family members with disabilities. While our company doesn’t specifically build houses to be handicap accessible, we do offer many different plans throughout our communities that offer the convenience you need.

These accessibility features include:

Wheelchair Accessible New Homes from LGI Homes

LGI Homes takes into consideration all potential occupants of their new homes, which is way all are made to wheelchair accessibility codes and guidelines.

Gradually Sloped Driveways – We have homes on various terrains, some of which feature driveways with a gentle slope. This is perfect for wheelchairs and walkers, as will be much easier to navigate than a steep driveway. Not only will this make it easier to get in and out of your home, it is much safer and poses fewer safety hazards.

Single-story Models – Many of our homes bring all of the conveniences and rooms together on one floor, eliminating the need for stairs. For residents who need wheelchairs, walkers or canes, this can make moving around the home easy and ensure you have full access to your home.

Stair-Less Front Entries – Most of our models have paved walk ways to the front door with no stairs. While some may have a step up into the house, a portable ramp can assist you without having to install a permanent ramp to have access to the front door.

Open Floor Plans – A great deal of our floor plans are very open, which makes moving around with a wheelchair or walker far easier than trying to get through tight hallways. Getting from the kitchen to the living room is a breeze, and your guests will love how welcoming and inviting an open floor plan feels when they visit.

To see how LGI Homes can help you obtain your dream home, visit one of our offices in the Dallas, Ft. Worth, Austin, San Antonio, Houston or Pheonix areas.

Know Your Neighborhood: Presidential Glen

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Presidential Glen Community Attractions

Here at LGI Homes, we take pride in not only the quality and affordability of our homes, but also in the locations we select for building each of our communities. Each community location is chosen with you in mind, and we take every care to ensure our communities provide convenient access to some of the best restaurants, parks and attractions Texas has to offer. As part of a new series, we are showcasing some of these locations to help you become better acquainted with the area around you. Today, we are showcasing some of the best local attractions and businesses near our Presidential Glen community.

Cafe 290
11011 U.S. 290
Manor, TX
(512) 278-8780
If you’re in the mood for a roadhouse-style burger, a plate of enchiladas or a slice of meringue pie, Cafe 290 has it all just three miles east of the Presidential Glen community. Serving up authentic Tex-Mex and home-style fare, Cafe 290 is some of the best food in the Manor area.
Austin County Flea Market
9500 U.S. 290
Austin, TX
(512) 928-2795
Whether you’re looking to snag a deal or clear out the garage, the Austin County Flea Market provides the place to do it less than three miles from Presidential Glen. With over 300 vendor booths, live music on the weekends and concession stands, it’s the perfect place to grab lunch and spend the day with the family while scoring unbeatable prices on jewelery, antiques, collectibles, sporting goods, clothes and more.
Bluebonnet Hill Golf Course
9100 Farm to Market Road 3177
Austin, TX
(512) 272-4228
Gold enthusiasts at Presidential Glen will love the five minute drive to Bluebonnet Hill Golf Course, a 328 bermuda green course with rolling hills and beautiful scenery. Residents just starting out in the sport can take advantage of lessons at Bluebonnet Hill Golf Course, and the course offers various memberships to help you save on your favorite pastime.
Star of Texas Fair and Rodeo
9100 Decker Lake Road
Austin, TX
(512) 919-3000
Presidential Glen residents don’t have to wait for the rodeo to come to town, because they live less than four miles from the Star of Texas Fair and Rodeo. The Star of Texas Fair and Rodeo is the 5th largest indoor rodeo regular season ProRodeo, and offer year-round entertainment to people in the Austin area.
Texas Natural Science Center
2400 Trinity Street
Austin, TX
(512) 471-1604
Treat your kids to a day of knowledge and excitement by taking a trip to the nearby Texas Natural Science Center. Here they will discover fossilized dinosaurs, Texas wildlife, ancient gems and minerals and more. The Texas Natural Science Center is a great place to learn more about the history of Texas, and is sure to be fun for the whole family.
Austin Children’s Museum
201 Colorado Street
Austin, TX
(512) 472-2499
Like the Texas Natural Science Center, learning is fun at the Austin Children’s Museum; a museum built entirely with children in mind. From a city building exhibit to the Tinker’s Workshop and design center, there is something for children of all ages to enjoy at the Austin Children’s Museum, just 10 miles from Presidential Glen.
Highland Mall
6001 Airport Boulevard
Austin, TX
(512) 454-9656
Whatever your shopping needs may be, the Highland Mall is sure to have what you’re looking for. With dozens of retailers and restaurants, including Foot Locker, Aeropostale, Radio Shack and SweetFactory, the Highland Mall is your one-stop shop for school clothes, Christmas gifts and more just six miles from your home in Presidential Glen.

All About: Mortgage Pre-qualification

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The purchase of a new home requires learning all about various aspects of homeownership (financial, legal, and practical) that can be overwhelming to a first-time homebuyer and homeowner. As part of our ongoing All About series, LGI Homes seeks to provide an easy-to-read and easy-to-understand resource that goes in-depth on a variety of subjects connected to buying a home. Today, we explore the world of mortgage pre-qualification and how it will play into your experience of buying a home.

Pre-qualification Mortgage Approval

If you’re interested in buying a home, you should familiarize yourself with the process, including pre-qualification of your mortgage loan.

What is mortgage pre-qualification?

Mortgage pre-qualification is a process that involves either sitting down with a potential lender or speaking by phone to calculate how much you can realistically spend on a home. Potential lenders will take your income, assets, debt and potential down payment amount and run them through a calculator to figure how much you can afford to pay monthly on a mortgage.

Why should I pre-qualify?

Mortgage pre-qualification allows you to figure out if buying a home is in your best interest and gives you an idea of how much money you have to work. Without mortgage pre-qualification, you may assume you can spend less or more on a home than you realistically can. Mortgage pre-qualification also helps you narrow down homes when browsing, as you will be less likely to look at homes outside of your budget.

What are the commitments and costs of mortgage pre-qualification?

There are no costs or commitments on either side for mortgage pre-qualification. Think of it as a free consultation.

When should I check my mortgage pre-qualification?

You should speak with lenders and test your mortgage pre-qualification as soon as you decide to buy a home.

Are there any misconceptions regarding mortgage prequalification?

Yes. Mortgage pre-qualification is not the same as mortgage pre-approval. Pre-approval involves a tentative commitment to a lender. The lender tells you exactly how much money they will lend you and your job is to find a home to spend the loan on. Pre-qualification is based on the idea of “might,” pre-approval is based on the idea of “will.”

Are there any other benefits to mortgage pre-qualification?

Yes. Mortgage pre-qualification gives you the ability to shop different lenders to find one you enjoy working with. Because it is free, you don’t have to spend money out of pocket to meet with lenders and get an idea of what they might lend you and what the terms might be.