Should you rent or buy?

For many, the question of whether to rent or buy comes down to finances. There is a perception that buying a home is more expensive than renting. However, that is not always the case.

In recent years, the demand for rental units has increased as homeownership rates decreased due to a shaky economy and high levels of home foreclosures. The increased demand for renting caused monthly rental payments to increase and made it more difficult to find acceptable rental options.

Current mortgage interest rates are at historical lows, and when combined with today's affordable home prices, monthly mortgage payments can be about the same cost – or even less expensive – than renting. Homeowners may be eligible for additional tax savings. Real estate taxes and the interest on your mortgage are typically deductible from your income tax.

There is a perception that buying a home is more expensive than renting. However, that is not always the case.

Next, there is a misconception that people need to save for a big down payment. Many buyers don't realize that there are down payment assistance programs available from community and government agencies for both first-time and repeat homebuyers. Buyers should also meet with a mortgage consultant to determine if they will qualify for an FHA loan, which allows for a down payment as low as 3.5 percent of the purchase price. There are even zero-down loans available to qualified buyers.

Of course, some homeownership advantages are impossible to quantify. By having a long-term investment in a piece of property, homeowners often feel a sense of personal satisfaction and are more likely to work towards creating a safe community. And, the freedom to make home improvements and décor choices also appeals to many homebuyers.

Think it might be time to buy? Our first-time homebuyer tips can help you learn more about the home buying process.