There are several important questions to consider before you rent or buy a home.

• Am I willing to commit to living in this area long term? • Do I have enough saved for a sizeable down payment? • Have I considered all of the costs? • Do I need to build up my credit rating?

Am I willing to live in this area long term?

If you are willing to commit to an area long term you should consider purchasing a home. • You shouldn’t consider purchasing a home if you’re already thinking about when

you’ll move out. If you own a home more than five years and invest in home improvements you have a better chance of seeing a return on your investment.

• Renting means paying a fee to borrow a home for a period of time with no lasting gain for you. Alternatively, buying a home means building up your assets.

Do I have enough money for a sizeable down payment?

In the short term, renting is less expensive than buying. • Renting costs less in the short term because

buying a home typically requires a down payment of about 20 percent unless you have a very good credit rating.

• If you’re concerned about up front costs of home ownership you can also seek down payment assistance.

Have I considered all of the costs?

Renting generally means you can expect your landlord to cover unexpected costs such as a broken AC unit. If buying a home, be sure to calculate your anticipated costs after the home is yours. Here are a few expenses to keep in mind: 1. Utility costs increase with the square footage of your home 2. Repairs will be your responsibility 3. Lawn care is necessary for any home, but depending on your neighborhood you

may be required to hire a lawn care service

Do I need to build up my credit rating?

If you’re comfortable with the cost differences in renting versus buying, you may want to factor in your credit rating. • Renting a home can build up your credibility, but not your credit. • Making timely loan payments can help improve your credit rating significantly

since payment history accounts for about 35 percent of your score. • As your home loan balance decreases, your credit score will increase. The

better your debt to income ratio, the more favorably you will be looked at by lenders.

http://www.realtor.com/home-finance/homebuyer-information/how-a-home-loan-impacts-your-credit-score.aspx

Additional Advantages of Renting Lower initial costs

• Signing fees for rental units are significantly less than down payments on homes. These fees are often a deposit that either go toward the first month’s rent or you can get back at the end of the lease.

Little maintenance responsibility • Landlords typically cover the costs of

maintenance issues and occasionally cover the arrangements for maintenance as well.

Low risk

• When you rent, you’re in a binding contract for a limited amount of time, which gives you the flexibility to move around as needed.

Additional Advantages of Buying Steady costs

• Unlike rent payments, which are subject to change unexpectedly, you’ll have a steady loan payment each month.

Tax breaks • Owning a home means you can

receive tax deductions for real estate taxes and home mortgage interest, among other things.

Freedom

• When you own a home you’re building up your own equity and you can make renovations and improvements to the property as you see fit.

Rent or Buy?

http://www.NewAmericanFunding.com Learn more about buying your first home at