Upfront Costs of Renting An Apartment Or Buying A Home

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Not sure if its better if your buy a home or rent an apartment? This is a question that is asked all the time without a direct solution. Most of the time it entirely depends on your own personal situation including income, total savings, job security, and overall preference. But there are some costs that you should be familiar with. So read on and learn how you might budget for either option. 

Renting or Buying

One of the biggest differences between renting and buying will be the amount of money you have to put down initially.  When you rent an apartment home you will have minimal upfront costs. As a renter you will be paying fees including an application fee, security deposit,  and a small administration fee.  And thats all you will have to put down.  And remember if you keep your place clean and don’t damage the interior you will receive all of it in return.  So in the end renting is relatively cheap compared to buying a home.

When it comes down to buying a home you will find out there are many upfront costs that will make it significantly more expensive.  Things like the down payment, origination fees, inspections, and appraisals all add up.  The fees will usually depend on the cost of the home, but your mortgage broker can give you more accurate details about the costs you will incur.

We will use $300,000 as a figure to begin with for a home. Here are some fees you can expect to pay

Down payment: (20%)  $60,000

Closing Costs: $9,000

Inspection: $300 - $500

Of course you can make smaller down payment based upon your credit score and the length of your mortgage.  But this will give you an idea of what you may need to bring to the table.

Don’t forget about property taxes, HOA fees, furniture and other expenses you will occur  once you close on the home.