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Should I Rent a Home or Buy?

Buying a home is an experience we all truly want to have at some point. The stability that we receive from owning a home is unquestionable, but is it the best thing for you financially? Renting might just be a better option for you, but how can you find that out? Well, here are some tips to pay attention to. Buying is awesome, but you do not want to do it if it is not the best thing for you.

The Positive and Negative of Owning a House

The positive of home ownership, outside of actually owning a house, is building equity in that investment. As long as your home value rises, and this often depends on the area, then you can get a great return. When you buy, you are good to go. You do not have to worry about a major rises in the cost of housing because you already have a house. This eliminates any worries about affording a house in the new market.

One the other side is the negative. When you buy the home you are responsible for everything. If your house needs a lot of improvements, you are on the hook for all the money it is going to cost to fix it. Usually in an apartment the landlord will be responsible, but now you are the landlord. You will also have to deal homeowner's fees and closing costs. The amount of fees and costs will add up. So not only will you pay a lot of a home, but you will come across more fees then you may have bargained for.

Well What Options Do I Have?

One of the great options you might have is lease with an option to buy. This can really be helpful. In the beginning you do not actually own the house, but all the money you put into the rent will go towards the actual amount owed on the house. Then there will be a designated period of lease. It could be 12 months, or it could be 36 months. At the end of that time you will have two choices: end the lease and move on or end the lease and buy. This gives you a chance to assess the housing market and see if this home you are in is still your best option. If you end the lease and move on then you are out the money you already spend. If you find this is your best option and you go buy, then you will continue the payments.

Know Your Finances

The most important thing is for you to know the money you have, and know what you want to do with your money. Then set out to get the best deal available. Be aware of how the housing market is working at the moment and get an idea of where that market might lead to.

National Rate Averages

Mortgage Rates

Product Rate
5/1 yr ARM 3.147%
1 yr ARM 3.299%
15 yr fixed 3.221%
30 yr fixed 3.815%

Home Equity Rates

* Updated Jun 8, 2012