Should You Rent or Buy a Home in Denver, CO?
Deciding between renting and buying a home in Denver requires some legwork. One place to start is to take a close look at your financial situation and to determine what's right for your bottom line. There are many things to keep in mind. If you are on the fence trying to determine if now is the time to buy, keep the options open, and consider a few key factors.
The Costs of Renting
What goes into renting? Before you consider buying a home in Denver, look at some of the costs of renting the property.
- You'll need to put down a security deposit initially. This is generally one or two months’ worth of rent.
- You'll need to pay your monthly rental payment.
- You may be asked to pay for renter's insurance.
- You will need to account for utility costs, which utility bills you will be responsible for differs from one location to the next.
- You may have to pay for access to amenities, including laundry facilities.
- You will have to give up your ability to make major changes to your apartment (e.g. change your countertops, add wood floors, etc.)
- You will be paying your landlord hundreds, may thousands, of dollars every month rather than paying towards building up equity on your own home.
- You may have to pay for parking.
The Costs of Buying
For those considering Denver, Colorado real estate to purchase, you, too, will have costs to pay. The benefit here, though, is that you are paying into something you will eventually own.
- You'll need to make a down payment. The minimum amount you will need to pay for your downpayment will depend on your lender. The lower your credit score, the more you may be required to pay for your down payment.
- You'll need to pay closing costs, which often amount to about 5 percent of the purchase price. (note: closing costs (e.g. who will pay for home inspection) can be negotiated with the home seller prior to the day of closing.
- You'll need to account for your monthly mortgage payments, which will include the cost of interest on the loan.
- You'll need to pay real estate taxes and, in some cases, a homeowners association fee if you buy into this type of area.
- You'll also need to pay homeowners insurance and property tax.
- You should also expect to pay more for utilities when you own a house.
One of the most significant difference between buying a home and renting one is that with buying a home, you are able to pay towards your own the home every month, and you can look foward to owning your own home completely at the end of the mortgage period. With renting, you must keep paying month after month for as long as you live there.