Dollars & Sense - Buy or Rent

Is it always smarter to buy a house rather than remaining as a renter? Home ownership has long been “the American Dream”. With current mortgage interest rates at the lowest we’ve seen in a generation a lot of young people see this as an opportunity to participate in that dream but is it the smartest way to go? You’ve heard people say that renting is like throwing your money away. They say if you buy you will at least be putting some of the money that was going into rent towards building up equity as you pay down a mortgage. This may all be true but buying a house may not be right for you. If you are a person whose job keeps you away from home or requires you to relocate every few years, the cost of buying and selling houses along with the cost of home improvements can make home ownership very expensive. Also, if you’re fortunate enough to be renting a place that you like and where your landlady or landlord likes you and doesn’t continuously raise the rent, why buy? It’s not uncommon to find a rental whose owner is content to have a trustworthy renter as a caretaker for the property while providing a little extra income to the rental owner. Buying a house means paying property taxes, fire, earthquake and liability insurance in addition to mortgage payments. Then there’s the maintenance and yard work. If you’re a single parent or a working couple, is this your idea of a fun way to spend a weekend? If not, then you’ll need to hire someone and add those expenses to the overall cost of homeownership.

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