When you’re in the market for a new place it’s the first question you have to ask. It’s a proverbial fork in the road and the first of many decisions—do I want to buy a home or do I want to be a renter?

There are a number of factors to take into consideration when you want to make the most prudent decision possible. However, here are a few things to think about before making this pivotal choice.

(1)Honestly assess your present and future financial situation

Whether you’re looking in Tulsa, Oklahoma or San Diego, California there’s no one way about it—buying a home is a financial undertaking. The moral of the 2007 meltdown is to remember that regardless of what you’re told you need to research whether or not a home purchase is something you can afford both at present as well as years down the road. Don’t plan on pay raises or the price of your home increasing in value. Make the most conservative forecast possible to ensure that you don’t end up in the ugly situation so many Americans have found themselves in with their homes

(2) Consider your length of stay

If you are unsure about how long you are going to be in your home or know with certainty that it is only going to be for a short time, seriously consider renting. Remember that the benefits of homeownership come with time; there isn’t a sno-cone’s chance in Phoenix that over the course of a few years the appreciation rate on your property(the ultimate benefit of buying a home) is going to make it worth paying all the expenses related to purchasing(property tax, homeowner’s insurance, closing costs). Even in the best of economies you would need an astronomical rebound in home prices to come out ahead. Prices are low right now, but to think they’re going to come back that quickly is simply a pipe dream.

Again, these are just a few things you should think about before you make your decision. In order to consider how interest rates, mortgage terms, closing costs and other issues factor into your situation use some of the “rent or buy calculators” on the internet to help you make your decision. As always, be sure to use a few of them and always consider your own projections. You can never be too careful out there.

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This is filed under Rent Vs Buy.

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