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BellaOnline's Home Ownership Editor

To Rent or To Buy

At one time, home ownership was a major financial asset. Renters pay monthly expenses for the landlord and that money is never seen again. When you own a home, your monthly payment creates added benefit in terms of your federal income taxes, and perhaps your state's taxes too, depending on where you live. Currently, you can deduct the interest on your mortgage (which is a substantial portion of the payment for the first many years) and you can deduct the property taxes you paid. Renting may free you up from maintenance and repairs, you have no protection against rent increases.

One thing to consider is how long you plan to stay in the home. There are upfront costs to purchasing a home. If you plan to stay in the home at least three years, the benefits of home ownership could outweigh the short-term benefits of renting.

This past year home prices have declined dramatically. The market has to level out for a while or no one would be able to afford a home. It is could be considered a price correction. Even though, buying a home, and taking care of it, is one of the best ways to invest in your future.

Home ownership doesn't only make sense financially for everyone as we are well aware of how many foreclosures have hit the market in the past few years. It is also important to remember that a home is the place where you live, raise your family and, sometimes, make lifelong friendships, not just an investment.

If you feel homeowner ship is a positive move for you, determine if you are ready to buy a home. Here are some questions you should consider:

1. Do you have a steady source of income, which can be documented or verified?
2. Do you pay your bills on time?
3. Do you have money saved for a down payment?
4. Do you have the ability to pay the mortgage plus related housing expenses?
5. Do you you have decent credit with which to obtain a mortgage?

History proves homeo wnership offers many benefits. Owning a home gives you freedom, stability and security. You are in control. Only you can permit someone to enter your home. You can have a pet without paying the landlord a deposit or asking permission. You can paint the walls red, white and blue if you wish, but remember, it is a financial commitment.

Remember, there are homes in all price ranges and, when you are ready to become a home owner, make sure you buy a home in the price range comfortable for you. Generally, a good estimator is that housing costs are about 1/3 of your income.

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