November 2017

Is buying a home right for you?

Buying a home is a worthwhile goal, but it's also one of the largest financial decisions you will ever make. Before you decide whether buying is right for you, it's a good idea to weigh the pros and cons of both buying and renting.

Buying pros: Full control to customize, potential to build equity, interest may be tax-deductible[Footnote 1]. Buying cons: High initial costs, responsible for repairs, harder to relocate.
Footnote 1
Renting pros: Lower up-front costs, not responsible for repairs, easier to relocate. Renting cons: Harder to customize, rents can increase, no way to build equity.

Think past the bottom line
Remember, the full cost of buying a home goes well beyond the cost of your down payment. You will also want to take into account your mortgage payments, closing costs, mortgage insurance, costs for moving and other expenses.

Start with the Mortgage Calculator from Bank of America to help you estimate your monthly mortgage cost so you can compare that to the cost of your monthly rent payments.

The more you know in advance about how much it will cost you over time to rent instead of own, the better prepared you'll be to decide when — or if — buying a home is right for you. Use this cost comparison calculatorFootnote 2 to get a long-term view.

For more information, check out the Better Money Habits® video, "Is buying a home right for you?"

 

1Please consult your tax advisor regarding interest deductibility.

2"The Upshot: Is it better to rent or buy?", nytimes.com

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