As home prices begin their slow crawl in a positive direction, many people are asking the questions, “to buy or rent or both?” Recently, the real estate listings data site Trulia came out with a new analysis that addresses these questions. Their findings are that it is still a sound choice to buy a home rather than rent a home. Renting is only better if you can’t qualify for a low mortgage rate or if you move around a lot.
This analysis also showed that some consumers think buying a home is less attractive than renting. Today, buying a home is around 44% cheaper than renting and many of them can’t see that it’s a much better deal than renting.
Home prices have gone up much faster than rent prices; however, when you factor in the low interest rates, buying a home can be a much better choice than renting a home. The current interest rate on a 30-year fixed –rate mortgage is 3.54%, but that changes often. So, when you are trying to decide to rent or buy, check out the current interest rates to help you make the right choice for your situation.
There is also the option of buying a second home or investment property to rent out. You will have real estate to help your net worth, while your renters pay your mortgage. If you rent your home for the right amount, you can pay your mortgage, set some aside for repairs and maintenance and have a little left over. Buying and renting can be a win, win situation.
So, are you ready for home ownership over renting? Ask yourself these questions:
* Can you quality for a low mortgage rate?
* Which tax bracket will you be in?
* How long will you live in the home?
All these questions are important when deciding to purchase a new home. To determine if you will save money by buying a home you should have answered yes to each question. You can save the most by qualifying for the low mortgage rate of 3.5%. You can save even more if you itemize your federal tax deductions and fit into the 25% tax bracket. Even more savings come when you live in your home for at least seven years.
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