Renting vs. Buying
When is the "right" time?
When is the "right" time?
Are you contemplating the decision to rent or buy a home? It's definitely a defining moment in most people's lives and worthy of careful consideration. The financial aspects play a large role in the decision, but you should also consider your lifestyle.
The following collection of Pros & Cons, the Lifestyle Survey, as well as the Rent vs. Own Comparison Calculator will help get you started!
|PROS & CONS|
|Financial Obligation||None, unless terminating a lease early||Must sell to relocate; length of time to sell can vary on market conditions|
|Contracts||Requires lease; may require cosigner; can incur penalties for breaking terms||Requires qualifying for a mortgage; terms vary on length, interest rate, qualifications, etc.|
|Payments||Rent can increase yearly; penalties for late payment||Typically consistent payments but variable rate loans may increase/decrease; penalties for late payment|
|Deposits||Varies based on lease; may or may not be refundable||None|
|Down Payment||None||Varies based on mortgage requirements|
|Maintenance/Repairs||Little or no maintenance required||Self maintenance or hire maintenance|
|Maintenance Costs||None or very little||Responsible for all|
|Insurance||Highly recommended to cover property contents||Required by the lender|
|Tax Benefits||None||Deduct mortgage interest and property taxes|
Are you ready to own your own home? Ask yourself these questions.
- Do you need the freedom to move quickly if you take a new job?
- Are you settled and satisfied you'll remain in the same town for quite some time?
- Does your income fluctuate frequently?
- Do you have a steady income?
- Does your job take you out of town frequently, prohibiting you from doing repairs or maintaining a yard?
- Do you have the skills and common tools necessary to do your own home repairs? Can you afford to hire maintenance?
- Do you have children who will soon be entering school?
- Do you wish to make your home truly "your own"?
- Do you wish to take advantage of the tax benefits associated with home ownership?
- Are you able to save for a down payment?
- Do you have good credit or are you willing to make the effort to repair your credit record?
Will Buying Save You Money?
As a renter, your rent may be less than or about the same amount as a mortgage payment. But the tax benefits associated with owning a home can amount to significant savings. Try this Rent vs. Own Comparison Calculator to compare the prices for renting versus buying a home.