Decide to Rent or Buy!Should I rent or buy a home? Weigh the difference before you decide. Just take a look at what happened to the housing market when people were encouraged to purchase a home even though they were not really ready for the responsibility. If you are trying to decide whether you would be better off renting or purchasing a home, here are some things to consider about home ownership vs renting. 
There was a time my wife and I decided to rent for a while. We had just sold our home and could not find one we really liked. We ended up renting a town home for 5 years. Our rent payments at the time were $850/month.First Time Home Buyers Credit ReportDo you know what your credit rating is like? With a FICO score that is under 620 you will not be able to get a good interest rate on a loan, and it could even mean that a predatory lender may pick up your application and that could cost you big time. Debt to Income RatioWhen you are weighing the differences between home ownership vs renting, you have to consider what your debt to income ratio is to determine whether or not you would be able to afford the mortgage payment and whether a lender will risk financing a home for you. With a high debt ratio lenders are not likely to qualify you for a loan. In the case that you do find a lender willing to finance a home for you, you may wind up not having enough money to feed your family even on a penny-pinching budget. Job StabilityIf you are considering the advantages and disadvantages of home ownership vs renting a home, you have to consider the stability of your current or future job. Is your job in jeopardy due to company downsizing effort? If so, the decision to rent or buy a home can mean the difference between having a place to live or eventually being thrown out on the street. Use this free online calculator below to help you decide. Free Online Calculator Comparing Rent or BuyJust enter the amount you are paying for rent, what percentage your rent goes up every year, and how long you plan on renting before buying.Next put in the amount of money you have saved for the down payment. Wherever you have that money saved at, put in the savings interest rate you are getting. Now put in what the going rate for a mortgage is right now. Then the tax bracket you are in. Leave the annual real estate rate alone for now. Find out at what rate real estate is appreciating for in the area you want to buy and put that rate in. Now estimate what it will cost you to maintain the house. This is an annual figure. Some estimate $50 a month for maintenance, others a $100. You put what you think this cost will be. Remember when you are renting, the landlord pays the maintenance costs. As a home owner, that will be your responsibility. This is something to consider when you are deciding to rent or buy. Lastly, leave the selling costs as they are, unless you know this figure. Wholaa...there's you comparison! Now what do you think? Is it better for you to buy or rent? I hated those 5 years of renting I mentioned above! In our area, the money we were paying for rent would have easily bought us a home. I felt I was throwing my money away. I might have decided differently if I had used a calculator like this to decide. Renting may be the best option for a lot of different reasons. For one thing, if you own a home you have to be responsible for all the maintenance and upkeep yourself. If you are not good at or incapable of repairs, the favor between home ownership vs renting weighs heavily on the side of renting. Leave Rent or Buy and return to Mortgage Calculators main page.
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