Rent or Own a Home? Four Factors to Help You Decide

Posted by Bonnie Martin Designated Broker on Tuesday, April 30th, 2013 at 1:36pm.

homeowner_2761.  Basic Market Trends - Have you ever heard the saying that the three most important criteria in setting the value of a home are "location, location, location." Well, that remains true today, but they might want to add: "timing, timing, timing."

2. Your Financial Picture - One of the main considerations you have to make is this: does your current financial picture putyou in a strong position for home ownership? If not, then buying a house will not be a good idea no matter what the market trends indicate.

3. How Much Do You Have Saved Up? - Assuming that you're not worried about debt paydown or losing your job, then the most important factor to consider is how much savings you have. Many home purchases require 10 or 20 percent as a down payment on a mortgage, and while there are programs for first-time homebuyers and other ways to lower your down payment to 5 percent (or even 3 percent in some cases), that will increase your monthly payment because it will mean your total loan amount will be larger.

4.  What Are You Future Plans? - One of the things you always hear people talk about is that it doesn't make sense to buy a house if you plan to move in the next five years -- and this is absolutely true. Why? Because buying a house requires lots of fees and "transaction costs" -- these costs are unavoidable and can total up to 5 percent of the cost of the house or more.
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