Rent or Buy?

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Buying a Home

Thanks to the Internet, being an informed home buyer has never been easier. No longer are buyers completely dependent upon real estate agents and mortgage lenders when it comes to gathering information. House listings are readily available online, as are interactive tools that can estimate mortgage payments and percentage rates. If you have never bought a home before, you can find step-by-step guides to the process online. Even seasoned real estate investors can turn to the Web for news and advice, as the market is constantly evolving. Whatever your needs, the Internet is an invaluable source of information for buying a house.

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Rent or Buy?

The purchase of a home is likely the single largest transaction you will ever make. If you're wondering whether you're ready to take on the responsibilities of home ownership, and (more importantly) whether you can afford it, the Web can help you be more informed as you make that decision.

Dulcinea's Insight

As you consider the pros and cons of home ownership, remember that some Web sites (particularly real estate sites) will try to sway you toward making a home purchase because it is in their best interests. Don't allow yourself to be enticed into purchasing a home that's more than you need or more than you can afford.

Online loan calculators use factors such as current interest rates and the length of a home loan to calculate what your monthly mortgage payments might be. If you use one of these tools, remember that these tools are meant to be a rough guide, and you'll probably be paying a slightly different amount than what the calculator determines. For example, factors such as your credit score, the property taxes for the home you end up buying, and the timing of federal interest rate cuts and hikes can all affect your monthly payments.

If you want to check your credit score, you can do so online at AnnualCreditReport.com, a secure site where you can obtain a free credit report once a year without any adverse effects on your credit score. You can also order individual reports from each of the three leading credit reporting agencies in the United States: Equifax, Experian, and TransUnion. Find out more about these agencies and other online credit tools in the findingDulcinea Credit Web Guide.

Dulcinea's Picks

To determine whether you should you rent or buy …

Move.com provides this calculator that helps you compare the costs of renting a home to buying a home by factoring in elements such as property taxes, appreciation, and closing costs into a home payment.

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SmartMoney.com has a worksheet titled "To Rent or to Buy?" You'll need to know some specific information to use this page, such as the amount of time you plan to live in your home, the term and interest rate for a home loan, the property tax rate in your area, and expected appreciation rates. Once you've entered the necessary information, the page will calculate your monthly costs for buying a home as opposed to renting one.

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Bankrate.com supplies an online calculator to help you figure out how much you can really afford to spend on a new home. This calculator differs from the others in that it factors your other possible monthly expenses, such as credit card and car payments, into the equation.

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MSN Real Estate features this article about the many financial costs of home ownership. Emphasis is placed on helping the reader understand that the financial ramifications of owning a home extend far beyond the purchase price.

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CNNMoney helps you determine whether you're ready to own a home by asking some questions about your finances, the housing market where you live (or will be living), and how long you expect to remain in the house.

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To learn what home ownership is like …

U.S. News & World Report offers an article about some of the benefits of owning a home that may surprise you, including a happier, healthier family, kids who perform better in school, and improved friendships.

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Generation X Finance is a blog that aims to teach the members of Generation X about achieving financial independence. This particular entry focuses on the less romantic aspects of home ownership, such as coping with the fact that many things in your home can go wrong at once.

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