Should You Rent or Buy a Home?

Should You Rent or Buy a Home in Missouri? 

Many factors come into play when deciding whether to buy or rent a home in the Southwest Missouri or Kansas City area. OakStar Bank can help you navigate this process and make the choice that’s right for you. 

Consider the Finances Behind Buying and Renting in MO 

When considering homeownership, be sure to have your financial house in order. Depending on the type of mortgage you qualify for, a down payment of anywhere between 5% and 20% is typically required. After you buy a house, it's important to have enough financial cushion to cover all your expenses. 

As you work towards securing a home loan, you must first determine which type of mortgage interest rate to lock in, whether that be adjustable (ARM) or fixed. It’s also important to prepare for all the costs associated with buying a home (including mortgage points and closing costs) to ensure you have all the necessary funds before making this big decision. 

There are multiple theories around how much of your gross monthly income should be devoted to your home mortgage. Some say no more than 28%, with overall debt totaling no more than 36%. But there are homeowners who exceed this threshold because they believe they will earn more money as their career grows and their home’s value will appreciate.  

Owning a home means you can build equity if you hold the property long enough and it appreciates in value. You may also receive tax breaks by owning, and your home could turn out to be a great investment if you sell it after its value increases.  

On the other hand, renting can be cheaper. The cost of owning a home goes beyond your monthly mortgage payments. As a homeowner, you’ll be responsible for all utilities, maintenance and upkeep. Some people prefer the convenience and savings that come with the support of a landlord. Renting also enables you to invest the extra money you would have otherwise put toward your home. 

Consider Your Personal Preferences 

The decision to buy or rent a home also comes down to personal preferences. 

When you own a home, you control everything, from the color of your home’s exterior to the fixtures you install. You’re also fully responsible if something breaks or needs to be replaced. In comparison, renting often comes with restrictions on what you can do with your property, but when it comes to maintenance, you can call the landlord.  

Amenities are another consideration. Homeownership gives you the flexibility to customize your property with a patio, swimming pool or outdoor fireplace, which you likely won’t be able to do as a renter. Depending on the property, renters may have access to similar amenities without worrying about upkeep, since the cost of a pool, gym or valet parking is factored into monthly rent payments. As a renter, however, you’re limited in your ability to make changes or upgrades to your space. 

Homeownership can also provide the satisfaction of a closer-knit community. Owning a home means you’re investing in a neighborhood, and you may feel a closer connection to your neighbors because of your commitment. That said, you’ll likely worry more about local politics that affect property and zoning, and you’ll want neighbors who respect their properties to help maintain the neighborhood’s value. As a renter, you can easily leave if you grow dissatisfied with your neighborhood. 

If you’re interested in weighing the costs of renting versus buying a home, use our buying versus renting calculator to crunch the numbers. When you’re ready to take the plunge and buy a home in Southwest Missouri or Kansas City, OakStar Bank can help you find the best mortgage options to fit your budget. Contact an OakStar Bank mortgage lender to get started.