| Buying a home versus renting a home has been | | | | they owe on their home decreases and the |
| an internal debate many homebuyers and | | | | value of their home increases. This equity |
| would-be homebuyers have had. With no | | | | can become a major factor in their overall |
| shortage of advice from well-intended friends | | | | financial picture. The ability to take out |
| and family, the decision can become quite | | | | home-equity loans and other lines of credit |
| difficult for potential homebuyers.The | | | | is a major financial benefit to buying a |
| easiest way to determine if you should buy or | | | | home.Ability to Move FreelySome people who |
| rent is to look at the pros and cons on each | | | | consider renting over buying a home point to |
| side of the issue. Once you have reviewed the | | | | the fact that they can move more freely if |
| pros and cons, you can determine which makes | | | | they rent rather than being tied down to a |
| more sense for you.The home buying versus | | | | house. Of course, the fact that leases lock a |
| renting debate usually centers on the | | | | renter into the rental for a defined period |
| following topics:* Financial considerations | | | | of time shatters that notion. In fact, many |
| (costs) | | | | people have found they can move more quickly |
| | | | and easily if they own a home by either |
| * Ability to freely move | | | | renting it or selling it when they want to |
| | | | move, without worrying about breaking a lease |
| * Tax benefits | | | | or losing security deposits.Tax Benefits of |
| | | | Owning a HomeThe tax benefits of owning a |
| * Overall life planFinancial | | | | home are substantial. It's a good idea to |
| ConsiderationsFor most homebuyers and | | | | speak to your accountant or tax advisor about |
| would-be homebuyers, financial considerations | | | | the benefits of owning a home and paying a |
| are the most important factor in making the | | | | mortgage (instead of paying a lease on a |
| decision. Though some financial experts are | | | | rental).Homebuyers benefit from tax |
| shocked that this is even an issue, many | | | | deductions and can build equity in their |
| understand that the confusion over finances | | | | home. This gives people greater financial |
| is primarily due to misinformation.Most | | | | flexibility and more opportunities.Some |
| potential homebuyers are shocked to learn | | | | homebuyers take periodic home equity loans to |
| that they can buy a home and pay very close | | | | remove the equity in their house and invest |
| to (or even less than) what they are paying | | | | it in higher interest, safe investments. This |
| for rent. In fact, it is usually a good idea | | | | helps improve their overall financial |
| to sit with a mortgage banker early on in the | | | | outlook. Home equity loans can also be used |
| process and tell him or her how much you | | | | to pay off high-interest debts. The reality |
| would like to spend per month for housing. | | | | is that homebuyers have many more options at |
| This can frame your search, because a | | | | their disposal than renters do.The Big |
| mortgage banker can tell you approximately | | | | PictureMost people who choose renting over |
| how large a mortgage you can carry for that | | | | buying make the decision based on |
| monthly payment.The Home Equity FactorIn | | | | misinformation. The best thing to do is |
| addition to finding a home similar in monthly | | | | research options, speak to professionals, and |
| costs to your rental payment, you also | | | | then make an informed decision on whether or |
| benefit from the equity that builds in your | | | | not you should rent or buy your home. After |
| home. When making a rent payment, you are | | | | research, some may still believe renting is |
| paying for the right to live in your home for | | | | better. But most will find the decision is |
| a period of one month. At the end of the | | | | fairly obvious and will choose to buy a |
| lease you have nothing to show for it, other | | | | home.* Copyright 2006, Brandon Cornett. You |
| than the fact you had a home for that period | | | | may republish this article if you keep the |
| of time (which of course is a great | | | | byline and author's note, and also leave the |
| thing).Home owners build equity as the amount | | | | hyperlink intact. |