How do you know if owning a home makes the best financial and personal sense for you and your family? Is it the right time for you to buy a home? Determining whether you want to own or rent a home depends on your personal preferences and your financial situation. Begin by asking yourself these questions:

• Do I/we have a steady, reliable income? If you are thinking of changing jobs or if your job is iffy, now is not the time to buy a home.
• How much total debt do I/we have (credit cards, car loans, student loans, etc.)? Is it manageable? If you are thinking of buying a car put it off until you have bought your home, if you can.
• Can I/we afford to pay a mortgage and other expenses, such as insurance and property taxes, in addition to our current monthly expenses? Note that there may be other monthly expenses such as water/sewer, garbage collection, gas/electric, and pest control that you might not pay currently.
• Do I/we have money saved for a down payment?
• Do I/we have money saved for closing costs?
• Do I/we plan to stay in the home for several years?
• Do I/we want the responsibilities (and lifestyle changes) that go with being a homeowner?

If you answered yes to these questions, then the time is probably right for homeownership.

Pros of ownership

• You don’t have the prohibitions of a landlord. For example, you can put nails in the wall to hang pictures or have a pet.
• Your home is not just shelter, it’s an investment. As property values go up, your equity in the home increases.
• The interest you pay on the mortgage and your real estate/property can usually be deducted from your federal income tax.

Cons of ownership

• It may cost more to own than rent the same size dwelling.
• Property values can go down as well as up.
• You have to maintain the home and pay any maintenance and repair costs.
• Moving to another home can be dependent on selling the current home.

You may also want to use the Should I buy a home or continue to rent? calculator in the CCU Mortgage Center resources to compare renting vs. buying. This calculator takes into consideration fees, taxes, and monthly payments.

Next in Chapter 1: Types of Homes

Prepared for Corning Credit Union by Remar Sutton & Associates, July 2004. Reviewed and updated May 2007. All rights reserved.