YOUR MONEY Renting Vs. Buying: Information And Education Are Key (NAPSA)—Deciding whetherto rent or buy a homeis one of the most important financial decisions many families make. Fortunately, the more information you have, the easier that choice might be. For instance, a little homework could reveal that thanks to declining interest rates and more attrac- tive pricing, you might be able to afford a new homefor about what you currently pay in rent. But analysts say home values and monthly expenses are only part of what should be considered when deciding to rent or buy. Real estate experts at Century 21 Real Estate offer this information to help you makea choice: Benefits of Ownership Pros of renting include flexibility, no upkeep costs and the ability to invest the money you might have spent on a down payment elsewhere. Cons includerent increases and the fact that you build no equity in the property. Pros of homebuying include tax breaks, the chance to build equity in a home andthesatisfaction of owning your own house. The government also offers incentives for first-time homebuyers. Cons include the costs of property and school taxes, upkeep, and mortgage payments, not to mention less flexibility to move. Knowing Your Budget It’s also important to analyze what you can afford to pay before choosing to rent or buy. Factors affecting affordability include: * Gross income; Funds you have available for a down payment, closing costs and cash reserves; Your debt and credit history; The type of mortgage you select and current interest rates. There are a numberof factors to consider when deciding whether to rent or buy a home. Anotherfigure that lenders use to evaluate how much you can afford is the housing expense-toincomeratio. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance (also known as PITTI). Finding Qualified Advice If you plan to buy a home, it’s important to work with a qualified REALTOR. Between explaining home loan options, the closing process and the new government stimulus, hiring a qualified real estate professional is more important than ever to help you navigate the complexities of a home sale transaction. According to the recently released Century 21 Real Estate LLC First-Time Homebuyers Survey, homebuyers who have a stable job history of at least two years, solid credit and down payment money that can be documented are “well positioned” to secure a mortgage in today’s credit environment. If you are likely to buy a home, you can find tips—including a “Buying 101” section and articles on how to make an offer and choose a real estate agent—at www.century21.com.
