To Rent or To Buy

Homeownership is a personal choice with many deciding factors. Most people don't know that buying a home can actually cost less than renting. And with low rates and an improving economy, now may be the best time for you to make the move.
If you are unsure of which option is right for you, here is some information that may help you make the best decision for you and your family.
The real estate website Trulia releases an annual Rent vs. Buy Report, which analyzes the average cost of renting versus buying for all homes on the market in America's 100 largest metropolitan areas. Although affordibility varies by location, buying a home is a 44% cheaper than renting nationwide.

Financial Considerations

  • Would you need to make changes in your budget to buy a home?
  • Would buying allow you to still maintain your other savings goals and stay prepared for potential costly home emergencies, such as a new roof or heating/cooling system?
  • Have you determined how much it'll cost you in property taxes, insurance, utilities and homeowners' association fees (if any)?
    • These costs vary by community. Property taxes, insurance and utilities will add to your monthly expenses.
  • Are you aware that housing is a fluctuating market and that the value of your home may decrease – or INCREASE – depending on the market?
  • Have you talked with an accountant or tax professional to see if you can benefit from the tax deduction on mortgage interest?

Remember, renting may provide you with more leftover cash each month, but renters are vulnerable to rent increases every year.

Buying a home may also provide you with income tax benefits* and offer you the chance to increase your personal wealth as you pay off the principal of your loan over time and build equity. (Equity is the difference between the market value of the home and the outstanding balance of the mortgage loan(s) on the home.) Please note that home values can rise or fall with time, so building equity is not guaranteed.

To determine if homeownership is affordable for you, use our mortgage calculator to estimate rent, mortgage or refinancing options.

Other Considerations

Aside from the obvious financial considerations, there are other factors that go into deciding whether you are better off renting or buying a home.

  • Do you want to be free to paint, remodel or renovate without permission or restrictions from the landlord?
    • Renting may severely restrict the changes you can make.
  • Are you ready to take on the responsibility of home repairs? Homeowners pay for repairs and upkeep rather than the landlord.

We know that buying your first home can be an intimidating process, but the first step is to make these initial decisions and then find a loan officer you can trust. We think you'll be impressed with the level of service and guidance that Pinnacle Capital Mortgage offers.