Buying versus renting

Should you rent or should you buy? There are a variety of factors to consider.

As a rule of thumb, if you’re planning on staying for the next 5-7 years, then buying a home may be a better long-term solution. On the other hand, if you’re thinking about moving in the near future, renting may be the better choice.

There are a variety of benefits of homeownership, including having the ability to paint, plant and make changes and renovations. Typically, that is not allowed when you rent. Also, when you own a home, it helps grow equity and you may be able to deduct mortgage interest on your taxes.

Surprising to some, buying a home is typically cheaper than renting, depending on the location.

Ultimately, you should weigh the pros and cons of buying or renting, but Fifth Third also offers a rent versus buy calculator to help.

Steps for First-time Homebuyers

Each first-time homebuyer wants something different. Some care about the quality of schools, others value nearby shopping and restaurants. Once those priorities are defined, here are some steps a new homebuyer can follow:

Step 1

Know your home financing team: When shopping for a home, it’s important to know the team you’re working with, including a real estate agent and banker. They will partner with you, answer your questions, and guide you through every step of the process. Their goal is getting you the keys to the home of your dreams. They can help you determine if you are truly ready to buy a home and what steps need to be taken. They will also assist in determining what is affordable for you and what you can quality for – and get you prequalified.

Make sure you are working with an experienced real estate agent who understands the market where you are looking. They will understand the current market trends that will affect your ability to make a strong offer on a home.

Step 2

Start shopping: Now that you’re ready to buy, it’s time to find your dream home. This is the fun part! The one challenge is to keep track of all the features of all the homes you see in your search. Our advice is simple: Take notes and take pictures. Also factor in costs for upkeep and if you would want or need to do renovations.

Step 3

Making the offer: Now that you have found the home you want, it’s time to make an offer. Your real estate professional can assist you with making an offer to the seller (in most areas, this is called a purchase contract or purchase agreement). The seller then has a specific time frame to consider the offer and accept it or submit a counteroffer to you. Once you and the seller reach an agreement and the offer is accepted, you are ready to finalize your financing.

Step 4

Apply for a mortgage: If you’re buying your first home, remember that the mortgage you choose is just as important as the home you choose. So, it’s important that you work with the right mortgage lender.

There is down payment assistance (DPA)² and other tools to get you into a home. For example, Fifth Third customers may be eligible for down payment assistance if they qualify based upon income level and by purchasing a property to be used as your primary residence in a low- or moderate-income census tract. Down payment assistance up to $3,600 is available.

Fifth Third's Community Mortgage¹ aims to make homeownership more accessible to more people. Low-income families often face multiple barriers to buying a home, with saving for a down payment and paying for closing costs at the top of the list. This is where the Community Mortgage can make all the difference. This mortgage decreases the amount of cash that homebuyers need for a down payment to 3% of the purchase price, while also providing eligible buyers with a credit they can put toward closing costs.

Step 5

Closing time: The hard part is over, and it’s almost time to open the door to your new home. There are still some important details left to do. In the closing, the loan documents are signed, the balance of the loan costs are calculated, funds are disbursed, and the transaction is complete. Then you will receive the keys to your new home. Fifth Third offers a post-closing document to help with this process.

Loans are subject to credit review and approval. Fifth Third Bank, National Association, 38 Fountain Square Plaza, Cincinnati, OH 45263, NMLS# 403245, FDIC Equal Housing Lender. Fifth Third and Fifth Third Bank are registered service marks of Fifth Third Bancorp.

¹To be eligible for the Fifth Third Community Mortgage, the property must be a one-unit, primary residence, in one of the following eligible states: FL, GA, IL, IN, NC, OH, TN, WV, KY, MI and the borrower's gross annual qualifying income is at or below 80% area median income (AMI). Available for 30-year fixed mortgage only. Adjustable Rate Mortgages (ARMs) are ineligible. 97% Loan to Value (LTV)/105% Combined Loan to Value (CLTV). Maximum Loan Amount of $250,000. Homebuyer education is required by at least one qualifying borrower. Borrower must contribute at least $500 of own funds. Fifth Third Community Mortgage includes a .25% origination fee (of loan amount) and application fee. Manual underwrite only.

²Down payment assistance may be taxable as income and reported to the IRS. Consult your tax advisor. Not available with all loan products.