Should You Buy or Rent Your Home?

The American Dream or National Nightmare of Home Ownership

Nobody can doubt that most people dream about owning their own home. And of course a home can provide asset growth, stability for a family, and real pride. But as we’ve seen on the news, homeownership that is not built on a strong foundation can also lead to a nightmare of foreclosures, past due bills, and stress.

Advantages of Home Ownership

So if you already pay rent, and you figure that you might as well just buy a home, is that the right thing to do. Well, sometimes it may help you. After all, you can get tax deductions and start putting money towards the largest asset that most Americans own. But make sure you have considered all sides to the issue before you buy.

Costs of Home Ownership

First, consider all of the costs of home ownership. You will probably have mortgage payments, but also homeowners insurance, repairs, and property taxes to pay. A lot of times when you see ads that tell you the cost of paying for your own home is no more than renting a home, they leave that part out.

You can use this monthly home loan payment calculator to help you get a better handle on the real cost. If a mortgage broker or real estate agent tells you that your mortgage payment will only be $1,000 a month, please add in another $250 for taxes and insurance. And then consider the cost of repairs.

The Right Answer

There is no right answer for every family. If you believe your income is stable, and that you plan to live in an area for an extended period of time, your own home may be great. But if you are not sure where you’ll be next year, or even in 3 years, you may avoid some hassle by just renting a home.

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Tags: Home Loans, homeowners insurance, mortgage, renters insurance, renting

This entry was posted on October 31, 2009 at 4:38 pm and is filed under Credit and Debt. You can follow any responses to this entry through the RSS 2.0 feed.