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For
most people who can muster the down payment, buying is the better choice.
But it's not a slam-dunk decision. Here's what you have to take into
account.
By
Adriane G. Berg
Still unsure that
buying a home beats renting? Even after the advice of well-known
financial planning experts such as your brother-in-law and your dentist?
Before you flip a
coin, here’s the answer: If you're like most people, you're better off
buying.
To put it simply,
being like most people means you'll stay put in your next home for
seven years or so. Longer than that, renting becomes irrational,
financially speaking. It means the numbers add up to a negative, and
you'll become a loser. The longer you rent without buying, the more you
will lose.
Although nearly
two-thirds of the nation’s households own their own homes, it’s not the
best choice for everyone. If you move a lot from city to city or you
have had credit problems or simply can’t afford the home you like, you
may be better off renting.
The choice between
renting or buying is a tough one, both financially and emotionally.
Owning a home means you have to pay not just the mortgage each month,
but real estate taxes, homeowner’s insurance, maintenance costs and any
other incidentals that occur. From an emotional standpoint, it
means you’ve agreed to establish roots in a single place with a
long-term loan that for most people, lasts 30 years.
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