Buying A Home vs Renting

If you're renting a home (as opposed to owning) is it cheaper, or more expensive? After all, if you're renting, you don't have repair costs, homeowner's insurance, mortgage payments, interest, and possibly private mortgage insurance.

Buying a home can also be a lot of work, keeping in mind the costs of mowing your own lawn and doing other maintenance to the home. But after all these costs, is buying a house still cheaper than paying rent every month? The answer is, "Yes, it could be!"

No doubt you've heard it a dozen times (or more) over the past year – property values have dropped and homes are now one third to one half the value of what they once were.

Because property value drops are so recent, the housing market it now much more affordable than it has been for 15 or 20 years. So how does this translate in terms of cost for owning versus renting?

Depending on location, rent is generally somewhere between $500 and $1,500 per month. A mortgage payment, on the other hand, for a house that is $120,000 is usually around $600 to $800, after factoring in down payment, and adding in the cost of taxes and insurance. Keep in mind, some of these homes that are $120,000 today, may have been as much as $240,000 (or more) just a couple of years ago.

When buying a home becomes as affordable as rent (providing you can come up with the needed down payment and closing costs), perhaps it's time you considered the difference and stop paying your landlord's mortgage for him.

If you have any questions about buying a home versus renting a home, please feel free to ask us. Just use the comment link below. We'll get back to you with answers, and remember, your email address is never published on this site, nor shared with any other entities.