What To Do: Rent or Buy?

Today is a tempting time to buy a home with interest rates and prices at their lowest levels in years. Deciding whether to buy or rent can be complicated, and potential homebuyers have a lot to consider this summer. Here are the somee key questions to help shoppers make wise financial choices when considering buying a home. 1. How much can you afford to put down? Can you afford the monthly payment? The size of the down payment will impact the monthly cost. 2. What other debt do you have?  Aim to keep total rent or mortgage payments plus other credit obligations fewer than 35 to 40 percent of your monthly income. 3. What is my credit score? Can I qualify for a good interest rate? For instance, a borrower with a score of 760 could pay nearly 2 percentage points less in interest than someone with a score of 620. That equates to over $3,000 less in mortgage payments each year. 4. How much will taxes, monthly maintenance or other fees cost? Remember to factor in these costs and incentives. Renters have neither these costs, nor tax advantages. 5. How many years will I stay here? Generally, the longer you plan to live someplace, the more it makes sense to buy. Over time, you can build equity in your house where renters do not.