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To Buy or Rent: A Sentimental Look

road diverge

That's the question that seems to be on everyone's minds, and there are a number of ways to look at it. You can look at it and crunch the numbers, you can look at it from a more personal, sentimental perspective or a combination of both.

If it were me, I'd want to buy a house. It's always been my dream. My parents are baby boomers and their generation had this same dream. They grew up in a post-war time when it was affordable to buy your own home, retire in the home and eventually pass that home on to their children. Granted, they waited a while after marriage to do such, but when the time was right, they bought the house of their dreams. I'm proud to say my mom and I still live there, and I'm pretty sure we always will.

It's nice to have that sense of security. The fact that we own our house means we can make the decisions on the property. We don't have to suffer through a 5% yearly increase in rent. And because we've paid off the home, the only expenses we incur are property taxes and upkeep. It gives us the ability to save for home upgrades. It's a liberating feeling to know that we're the decision maker in the game, and there is no landlord to answer to.

There are many options for the potential home buyer nowadays. Interest rates are at multi-decade lows, home prices have dropped significantly and since the recession, there are an increasing amount of REO bank-owned properties ready for the taking.  While rent may be less to begin with, studies have shown that by the 6th year of your mortgage, your monthly mortgage payment would be significantly less than a rent payment. If you can come up with the down payment (which can be as low as 3.50% on an FHA approved loan), there are many options available for potential home buyers to get into a house and begin living the American Dream.

How low will your payment be?