Couple with keys to new home


Find What Works for Your Lifestyle and Budgetary Needs

When it comes to your living space, there's nothing more frustrating than waiting for repairs or wasting hours at a laundromat because your dryer has been out of commission for months.

These pesky issues can disappear when you own your home, but this is a significant decision and likely one of the largest purchases you'll make in your lifetime.

Whether you're considering buying a home due to a growing family or simply wanting a place of your own, it's crucial to weigh the pros and cons meticulously. Crunching the numbers is essential before transitioning from a renter to a homeowner.

If you find yourself contemplating whether to stop renting and start buying—perhaps even considering your first house—it's vital to consider several key factors.

You need to ask (and answer) specific questions that will help illuminate your financial capabilities and life trajectory, as these will ultimately guide your decision to either continue renting or begin the journey toward homeownership.

Renting Can be Great

With renting, you’re not tied to one place or destination. You can pack up and move where ever you want. You can break a lease with few consequences, and your living expenses tend to remain the same without the cost of repairs, yard maintenance, or other home-related expenditures.

Renting Has Its Downsides

Dealing with slow repairs can be frustrating, but most importantly, rental leases expire. When faced with a $500-1,000/month increase, either you pay the money or you uproot your life and move to another rental that could have a rent increase in a year or so.

Your money flies out of your wallet and into your landlord’s bank account. Basically, you end up investing in their future and not your own.

The Upside of Home Ownership

The most rewarding thing about owning a home is having your own space. You can hang family photos on the wall without worrying about losing your security deposit.

In addition, the financial benefits of a fixed-rate mortgage ensure a stable monthly payment that doesn’t fluctuate like rent.

When it comes to tax deductions, you can often deduct your annual mortgage interest, mortgage insurance premium, and property taxes. If you have a fixer-upper, there’s an added incentive. Interest incurred on loans for renovation and construction can count toward your annual deductions.

Some of the Negatives

Not all costs of homeownership are fixed. There are fluctuations in property taxes as well as home insurance, depending on where you live. Plus, the total cost of ownership includes yard maintenance, repairs, and monthly utilities.


In order to make an informed decision on whether you can afford to own your own home, consider the full costs of ownership, how long you plan to stay in the home, and the current housing market.

Costs of Buying

A number of factors influence the total cost of a home and your monthly payment. Using the Rivermark Rent Vs. Buy Calculator can give you an accurate idea of those costs.

Your initial costs will be the down payment, based on a percentage of the home purchase price. A 5% down payment on a $400,000 home would add up to $20,000. Your monthly mortgage payment will include PMI (Private Mortgage Insurance), which can add hundreds of dollars to every payment.

Another cost is homeowner’s insurance. The total annual cost can range from $400 to $3,500 per year. At Rivermark, we make things easy and add that cost to your monthly mortgage payment. Check out Rivermark Insurance Agency to get a quote today.

Money Saved

There are multiple opportunities to either increase or decrease your monthly payment. Qualifying for and choosing a 15-year loan will often increase your monthly payment while decreasing the amount of interest paid by thousands of dollars over the life of the loan.

See a list of our current mortgage rates and decide what type of mortgage is right for you.

For first time home buyers, there are a lot of ways to help you become a homeowner. Check out our First Time Home Buyer options and start dreaming about your first home.

For the Long Haul

Ultimately, the most important consideration is how long you plan on living in the home. If your current monthly rent is $1,500 and you want to purchase a $400,000 home, you would need to live in the home for at least 4.1 years just to break even.

You Have a Job and Can Reasonably Expect Your Wages to Grow

Being stuck in a dead-end job doesn’t mean the end of the world, but being in a position where your wages can (reasonably) be expected to grow over time means that you might be in a position to buy a home.

It’s not to say that you have to make a lot of money to move into homeownership, but being in a place where you have solid earning power can mean a green light to start thinking about it.

If you think you might be able to buy a home, consider some of the additional costs. There are property taxes and the cost (and task) of repairs, and if you’d like to make any improvements to the home, be prepared to invest in that too.

You Have a Healthy Debt-to-Income (DTI) Ratio

In addition to having a consistent and reliable income, it’s important you have minimal debt. Like many homeowners, you may have credit card debt, student loans, or auto payments.

As long as you’re not drowning in debt, you have a strong credit score, and your actual DTI ratio isn’t too high, you may be able to look more into purchasing a new home.

If you’re on the stop-renting-and-start-buying trajectory, keep in mind the “extra” amount that may affect your buying ability. The total amount for closing costs and fees may be in the thousands to tens of thousands.

This means that you’re going to need to have that money—accessible and in its liquid form—when you sign all papers.

You Have an Emergency Fund

If anything unexpected happens as you apply for homeownership, you don’t want to find yourself between a rock and a hard place.

If you had to dip into all checking, savings, and emergency funds to secure a loan and close on a place, you don’t want to find yourself in the middle of an emergency situation without any backup.

You should certainly maintain an emergency fund and have some savings set aside. They should remain in place and untouched for the duration of the time that you’re in the process of buying a home.

You never know what the future holds, so it’s best to be—and stay—prepared.

You’re Not Finding the Home You’d Like to Rent

If you envision the sort of place you want to call home, and there’s absolutely nothing on the rental market, this could signal it’s time to buy.

Depending on where you live, the rental market might not be at its best, and the sort of cottage-home-with-a-fenced-front-yard property you’ve envisioned for four years is nowhere to be found.

However, an especially cute red brick starter home with an ample (and fenced!) side yard has piqued your interest. You pop into the open house only to find it has all you’d envisioned and more.

It’s on the market, and you’re in a place where you can afford it and have all your bases covered. This seems like a unique opportunity to transition from a tenant to a homeowner.

You’ll Be Staying Local for a While

Your job is there, and so are your connections. If you’re not a wandering nomad or apt to move around often, then you’re a good candidate for looking at buying a home.

If you foresee yourself staying put for at least five years, buying a home can make financial sense instead of continuing to rent.

It’s also important to consider the long-term benefits. If you’re living solo and can afford a home, you might also consider renting out an extra room or two to pay the mortgage or save for other things.

Going from tenant to homeowner to having your own tenants or housemates can mean you’re getting a jump-start on securing homeownership and building a strong financial fitness foundation.

You Have Some Money Saved Towards a Down Payment

It’s going to be important to have something in savings. It’s not just the fees and closing costs that will need to be covered, but you will need to have something put away for the down payment.

This can actually be one of the biggest expenses of homeownership. The figure you need to save depends on the property's cost and which lender you choose to use.

Some Rivermark loans, for example, don’t require any money down, though getting as close to the 20% down as possible is wise.

The sort of programs out there that will let you put less than 20% down will generally require private mortgage insurance (PMI) on top of the already-established payments, like taxes, interest, loan principal, and insurance.

That could add up, so aim for as close to 20% as you can.

You Have Good Credit!

You must have good credit if you’d like to move away from renting. It’s imperative with any loan type to have a strong credit report, and that’s something you should order for free before you start looking at buying anything.

You will need to review your credit report, look for errors, get mistakes corrected, and pay down as many small things as possible. Please note that it will take a few months to make these changes and “increase” your credit score, so plan accordingly.

If you’re considering buying a home and have questions about the process, Rivermark specialists are here to help.

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