mortgage

How do I: Decide if I should rent or buy a home?

Topic: MORTGAGE
Who is affected: STARTING OUT, COUPLES & MARRIAGE, HOMEOWNERSHIP
DEGREE OF DIFFICULTY: EASY
What you'll need: BANK STATEMENTS; AN UNDERSTANDING OF YOUR CURRENT FINANCIAL SITUATION

What you need to know

Owning a home seems to be a big part of the American dream, but in truth homeownership is not for everyone at every point in their lives.

To decide if it's right for you now or in the foreseeable future, you first need to determine whether you can afford to buy. Then, think about which option makes better financial sense for you at the time. You'll find that you can sometimes earn more by investing your money instead of putting it into a home.

Factors to consider include:

  • The amount of time you anticipate that you will stay in your new home.
  • The home's prospects for appreciation.
  • Taxes.

Buying a home can anchor you to a location. It can take years to offset the closing costs, broker's commission and other fees you'll pay when you buy. If you sell too soon, you won't net a profit.

On the other hand, if you've found the perfect home at a great price and plan to stay put for a while, buying may be a great choice for you.

 

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