When it comes to buying a home in this economy many home buyers find themselves asking whether its better to rent a home or to buy a home.
As prices fall and foreclosures the question isn’t whether buying is better than renting why buying may be better for one type of consumer while renting may be a better option for another.
It’s Better To Buy A Home if…
Usually if you ask a home buyer why its better to buy a home they will give you a number of emotional reasons such as a growing family, American Dream and the feeling of ownership. The truth is more black and white and deals with the current snapshot of the home buyers lifestyle and finances. It’s better to buy if:
- You plan to stay in the home a minimum of four years.
- You have good credit because bad credit can cause higher interest rates as well as higher payments.
- You have extra money. Your home can cost 35% more so having the budget to handle those extra costs is ideal. The home buyer is able to deduct mortgage interest (not everyone is able to do this)
- Your are willing to sacrifice freedom and spare time. Research shows that home owners have less free time than those that rent
- You love a bargain. Remember, low prices, low interest rates and desperate sellers equal great deals
It's Better To Rent A Home if….
- You want to live in luxury for less. You may not be able to or want to own your home but you can enjoy the luxury ammenties if you want including fitness centers, spas, luxury pools and mountain views.
- You don't have extra cash to deal with home repairs. Many homeowners complain that maintaining a home was an extra expense they had not expected. With renting you can have amenities included and on staff maintenance and property management resources.
- You want lower monthly payments. Regardless of what you hear, rent checks are usually lower than mortgage payments so your cash flow is better month to month.
Still Confused? Here's a detailed break down of renting verus buying over a 5 year from CreditLoan.com (click to zoom):
Bottom line?
If you stay in your home for 6 years,buying is better.
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