Rent v Buy

One of the decisions that many people need to make is whether they should buy a home or rent for awhile.

A key issue is whether you are planning to stay in the purchased home for at least five years.  If not, then given all the costs involved in buying a home, you may want to consider renting.

The following links may be helpful in making that decision:

The Buy v Rent Decision.  House Rules:  How to Decide if it’s time to own rather than rent, by Suze Orman.

Rent v Buy Calculator, from E-Loan (make sure you check and amend the assumptions when you get to the second page)

In terms of mortgages, be very careful of getting locked into a mortgage you cannot afford, one where the payments will increase in a few years, or an interest only mortgage.  However, interest only mortgages can be very good if you have the discipline to invest the difference between the equivalent of a 30 year fixed mortgage and the interest only portion every month in a good investment fund.  You could pay off your mortgage in roughly half the time.

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