Are you going back and forth on the decision to rent or buy your home? This is not an easy decision for many homeowners, as it does require a lot of financial planning, discipline, and evaluation of your personal situation. Some find that renting is the best option for their lifestyle, while others feel that owning is better for their financial needs and personal situation. Here are a few things that can help you understand weather renting or buying is better for you.

Financial Situation
When you choose to buy a home, you will typically need to make a 10 to 20 percent down payment. You need to figure out if you have enough money in your savings to afford this down payment and if it is worth it in your current situation. If you don’t have this kind of money, look to renting until you are able to afford a down payment. Also take into consideration the amount of credit card debt you have. If you have credit card debt, it can seriously jeopardize your ability to afford a home. Credit card debt often decreases your credit rating, especially if you have maxed out the majority of your credit cards. The best policy is to keep your credit card debt balances below 30 percent of the total credit available. Doing this will allow you to demonstrate strong financial discipline to a lender, making it easier for them to approve you for a loan. Credit card debt should be paid off as soon as possible. Instead of putting your savings toward a home, use the extra money to pay off your debt.

Being able to afford your monthly payment is an important consideration as you compare the cost of renting versus buying. As a renter, you normally have a set monthly payment that usually includes your utilities and other costs. Homebuyers will need to pay additional utility costs and will need to pay for any home repairs if there is a problem. Renters have the luxury of calling their landlords to fix and pay for a problem.

Moving Possibilities
One of the great things about being a renter is having the ability to move whenever you need to. You won’t be stuck in a home for a certain amount of time without being able to move if you need to. Renters need to review their lease agreements and find out if they can leave at any time. If you envision moving within five to seven years, you should plan on renting. A buyer will need to pay closing costs on a home and other expenses, which can be financially frustrating because these costs could take away 10 percent of the total sale price. If you plan on moving because of a new job or some other situation in the near future, renting is probably the best option for your situation.

Real Estate Trends
Based on your income bracket, you could be limited in the style of home you can afford. If you have a certain standard of living, renting might be your best choice. You can get into a great apartment in the heart of a downtown center or in your favorite neighborhood but may not be able to afford buying a home. You also need to consider real estate market trends because they do go up and down, making it challenging for some people to afford a home they really want.

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