goals are simple -- to ensure that you're happy with the home you
buy, that you get the best deal you can, and that owning the home
helps you to accomplish your financial goals. Most people should
eventually buy homes, but not everyone and not at every point in
their lives. To decide whether now's the time for you to buy a house,
consider the advantages of buying and whether they apply to you.
Owning should be less expensive
a guideline that may change the way you view your seemingly cheap
monthly rent. In order for you to see how expensive a home you could
afford to buy while having the same approximate monthly cost as
your current rent, simply do the following calculation:
your monthly rent, multiply by 200 = purchase price of home
$ 750 x 200 = $150,000
in the preceding example, if you were paying rent of $750 per month,
you would pay approximately the same amount per month to own a $150,000
home (factoring in tax savings). Now your monthly rent doesn't sound
quite so cheap compared to the cost of buying a home, does it?
more important than the cost today of buying versus renting, what
about the cost in the future? As a renter, your rent is fully exposed
to increases in the cost of living, also known as inflation. A reasonable
expectation for annual increases in your rent is 4 percent per year.
Next Step: Renting and Inflation
To Buyer Services