Should I Buy or Rent?
Ever feel like everyone's
doing it? Buying a home, that is!
Most people would agree that owning
your own home can be a very rewarding
experience. Not only do you have
a place to truly call your own,
but home ownership can also have
financial benefits. In addition
to building up your personal net
worth instead of "throwing
away" rent, the market trends
of increased housing prices make
home ownership a relatively attractive
investment right now.
This does not mean that home ownership
is for everyone. For example, if
you're planning to move in
a year or two, you won't likely
be able to recover the closing costs
of buying a home and it just might
be to your advantage to sit tight
and rent until you have more permanent
plans. In addition, your situation
may mean that you don't have
a choice between owning and renting.
This could be the case if you're
just fresh out of school, for example.
So where do you fit into the picture?
Read on to glean some insights to
help you determine whether you're
meant to be a renter (even for now!)
or if home ownership is right for
you.
Owning
With today's low mortgage
rates, many people are finding that
owning a home is often as affordable
as renting. If you have the funds
saved up to put together a downpayment
as well as cover off various closing
costs, then the ability to afford
monthly mortgage, property tax,
insurance and utility payments,
then home ownership is a great way
to build up equity over time.
Renting
Renting is definitely the way to
go if you have no extra money for
a downpayment, money that can take
a long time to save. In addition,
renting generally ensures that you
have a pretty good idea of what
you are going to be paying each
month: there are few surprises.
As a renter, if your toilet springs
a leak, you can call your landlord
to fix it. As a homeowner, you have
to call yourself...and pay
for it yourself.
Generally speaking, if you rent,
your financial burden will be lower
month over month. If you are disciplined
enough to invest some savings, you
might be able to earn a rate of
return that makes up for the missed
opportunities of home ownership.
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