Mortgages

With mortgage rates reaching all time lows and property values skyrocketing, many renters may be wondering if now is a good time to buy. Conversely, some homeowners are considering the advantages of selling their homes for a large profit, renting for a while, and then buying another home when the market cools off. Whether you own or rent, each situation has its own benefits and drawbacks. Consider these issues:

· Maintenance. Renters are used to having the yard and pool regularly maintained, as well as calling the landlord whenever something goes wrong. But when you own your own home, it's a different story - you're responsible for all upkeep
· But prepared to send more time and money on repairs - both emergency and planned -- because every leaky faucet and roof tile is under your jurisdiction.
· Disposable income. When you rent an apartment or home, most landlords will require the first month's rent and a security deposit - often two or three months of rent. However, when you purchase a home, you frequently must make a down payment to your lender, or pay a higher interest rate for the life of your loan if you don't. Either way, buying a home requires more of your disposable income than renting. Once you move into your new home and start considering the costs of new furniture, appliances, repairs and remolding you'll find you have even less money to spend on the non-essentials.
· Tax savings. In some states, renters can qualify for a renter's credit on their taxes. Owning a home, however, offers larger savings. Many expenses such as mortgage interest and property taxes are tax deductible.
· Investment. Those in favor of home ownership argue that when you rent you are spending money each month without building any equity. Others say that in the first five years of ownership, nearly 90% of the money you spend on mortgage payments goes toward interest and not toward building equity. If you hold onto your home for more than five years, you can consider it an investment - especially since buying and selling costs can be up to 10% of the property's total price. And since nearly half of the homeowners move within five years, many buyers would have probably done better financially if they had rented rather than purchased.