Buying a House or Rent

Advantage of Buying a House

-You end up being the owner

-Building Equity, Money will be yours

-Able to renovate and change as you choose

-Pets are your choice

-Homes usually increase in value over time (more equity/money)

-Parties and friends on your schedule

Disadvantage of Buying a House

-All responsibility is on you (Repairs, Money, Bills..)

-You might go into debt

-Need a down payment

-Bad Neighbours

-Interest on mortgage is more than renting

-"Other" Expenses (Insurance, Security…)

Advantage of Renting

-Cheaper

-No Maintenance

-No Down Payment

-Short Stay

- No tax

Disadvantage of Renting

-Bad Landlord

-Some don't allow pets

-No Changes

-Bad Neighbours

-Roommate

-Have to live by 'their' rules

-One Year Lease

-All your money is Lost

More Info:

http://warriorism.info/personal-finance-advice/renting-vs-buying-a-home.php

http://www.haesemathematics.com.au/samples/ibssl-2_15.pdf

Real-Life Examples:

http://www.getrichslowly.org/blog/2007/07/16/renting-vs-buying-the-realities-of-home-buying/

http://www.financefox.ca/owning-home-renting/

Example:

Determine the maximum affordable price a family should pay to purchase a home if they have a gross monthly income of $3600.00; monthly property taxes are $150.00, and monthly heating costs average $135.00 per month all year. The family is able to finance their mortgage at 7% and has $15000.00 available to put into a down payment.

Interest Rate Factor Table*

Rate Factor Rate Factor

6.0% 0.00640 8.0% 0.00763

6.5% 0.00670 8.5% 0.00795

7.0% 0.00700 9.0% 0.00828

7.5% 0.00732 9.5% 0.00861

Source:

http://realestate.yahoo.com/info/guides/buying-vs-renting