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Buying a Home Vs Renting

Most financial experts equated renting with throwing money down the sink. But today’s market has some economists and consumers thinking otherwise. It’s been said that home is where the heart is. And many people, after years of living in their parents’ homes, apartments or dormitories, long for a place of their own to call home.   Buying a home used to be a no-brainer. Most financial experts equated renting with throwing money down the sink. But today’s market has some economists and consumers thinking otherwise. The decision between buying and renting is no longer so cut and dried.   There are still pros and cons to each, however. If you’re considering getting a place of your own, there are several factors to consider when weighing the choice of renting versus buying.

Payments   Pros:

  • If you can qualify for financing (no easy feat in today’s market), purchasing a home may make more financial sense than renting.
  • Depending on the housing market where you live, your monthly mortgage payment could be lower than your rent would be.
  • At tax time, your mortgage interest payments are tax deductible, making the cost of home ownership even more attractive over renting.


  • In many markets, particularly urban centers on either coast, high home prices mean mortgage payments much higher than rents on comparable properties
  • In today’s tightened lending market, you often need to come up with a  20% down payment and all closing costs. Many people can’t amass this amount of money, and so continue to rent.
  • If you don’t have the best credit score, you will not be able to take advantage of today’s low interest rates.

Several financial institutions have developed comparison calculators to help potential home buyers understand the financial implications of buying versus leasing.

Equity   Pros:

  • Homeowners can use the equity in their homes as collateral for loans.
  • Large amounts of equity built up in a home over years can help with retirement or other goals.


  • The housing bust means millions of home owners are underwater on their loans, meaning their homes are worth less than what they paid for them during the boom. In other words, no equity.
  • Home prices were so over-inflated over the boom that prices may not return to those levels for many years. Meaning a house that you buy now will appreciate much more slowly than it would have in the earlier part of this decade.

Utilities and Maintenance   Pros: 

  • As a renter, your landlord is responsible for routine maintenance of your unit and possibly some utilities.
  • As a home owner, you’re free to make any changes or improvements to your property.


  • As an owner, you’re responsible for all of your utility payments and upkeep of your home. When the roof starts to leak, it’s up to you and you alone to fix it.
  • As a renter, you won’t have the ability to make any improvements or enhancements to the property without your landlord’s permission.  So although you don’t have to pay to fix the roof, you can’t paint your rooms any color you want or build the porch of your dreams, either.

Emotional Satisfaction From Buying a Home

One of the greatest advantages of home ownership may be the satisfaction that goes along with it. According to a survey conducted by the Meredith Corp, 86% of homeowners polled feel “owning a home is one of their proudest accomplishments.” The same survey found that 69% of Americans who rent feel that home ownership is an important goal.   To rent or buy is a personal decision dictated by individual circumstances. Buying or leasing a home comes with a lot of responsibility and a lot of joys.<!> And whether you buy or rent, it’s up to you to find your heart and make the house your home.

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