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How Do You Know When To Buy Or Rent A Home?
by Maximiliano Tito

Choosing a lifestyle is, of course, a highly personal
decision. Some people love their apartment or condo in
the city while others wouldn't trade their home in the
suburbs. Somewhere along the way, though, people decide
whether or not they buy a place of their own. Some want
to buy a home or condo but don't think that they can
afford to make this major step. Independent of lifestyle
choices, there are some concrete financial calculations
that can be made that help the average person to decide
which option may be better financially for their situation.

It is quite easy to go online and locate a calculator that
will give you a buy or rent recommendation from a realty
or mortgage site. Since all the calculators are slightly
different, you may wish to run several different ones just
for the added information and support. Before you can run
one of these calculators, you need to do some real
homework that shows you understand your current financial
situation and the major costs of the house that you are
considering. If you haven't picked out a house already, a
good real estate agent will be willing to work with you to
determine the numbers for a house similar to what you are
looking for so you can understand what kind of house you
can afford.

To get the information you really want to know or could use,
you need to know a few numbers from your current affairs
that answer questions such as How much money do you have
for a down payment?, How much money do you make per
year?, and How much are you currently paying in rent?
The figures you enter make a difference in the calculator's
recommendations. Another questions that you might be asked
is How much would the current home that you are considering
cost to rent each month? This question is designed so that
you don't compare the rent for a 1-bedroom apartment to the
mortgage on a 3-bedroom house with a 2-car garage. To
answer questions about your tax bracket and the percent of
your income that's paid in federal taxes, you may have to
refer to last year's tax return. For future reference, you
can deduct on your federal tax return a part of your home's
expenses. Many financial calculators also tell you if
owning a home can lower your federal tax return.

Financial calculators also ask information about the home
that you hope to purchase or one that's just like it. To
determine purchase price, you also need to know property
taxes, homeownership association fees, and other related
fees. If you don't know these answers or the going interest
rates, ask a realtor or talk to a bank or mortgage company.
Some calculators automatically fill in the current interest
rates based on where you live. A few calculators also want
to know how long you plan to reside at this residence.
Seldom does it make sense to purchase a home and live there
a short time before reselling it.

As complicated as it may sound to gather up all this
information, the investment in a home and change of
lifestyle comes with serious financial consequences that can
greatly impact your daily life. You really want to be
thorough about how you plan for your future. After you
enter these bits of information into the online calculator,
you can sit back and watch the calculator kick out
information that impacts your decision to either buy or
rent. Even though many of these calculators are sponsored
by home mortgage companies, these calculators will recommend
that you continue renting if the numbers just don't fit the
person's circumstances for buying a home at that time.

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