Should you be buying a home, or are you better off just renting?

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Buying a Home ... or Not

To Buy or Not to Buy

You may be tired of moving from rental to rental. Perhaps your landlord doesn't keep up the place as well as you'd like, and you have to ask permission every time you want to hang a picture on the wall. You may desire the financial security and rewards that seem to come with homeownership. Maybe you just want a place to call your own. On the other hand, maybe your mom or dad keeps asking when you're going to grow up and settle down, and you just can't seem to commit.

Ultimately, the reason you're thinking about buying a home doesn't really matter. People's decisions about housing usually involve much more than financial motivations. Whether you're tired of hauling your stuff from apartment to apartment or just don't want to live with pink and black wallpaper anymore, in my book that's a good enough reason to buy a home.

Many people debate endlessly, in some cases for years, about whether to buy a home or continue renting. Some financial considerations may help you decide.

From a financial standpoint, you really shouldn't buy a place unless you can anticipate being there for at least three years and preferably five or more. Buying and selling a property entails a lot of expenses, including the cost of getting a mortgage(points, application and credit report fees, and appraisal fees), inspection expenses, moving costs, real estate agents commissions, and title insurance. Top cover these transaction costs plus the additional costs of ownership, a property needs to appreciate a fair amount before you can be as well off financially as if you had continued renting. A property needs to appreciate about 15 percent just to offset these expenses.

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