Renting versus Buying
Renting vs. Buying a Home: Things to Think About
Excerpted from FDIC Consumer News
With housing prices still low in many areas and a favorable mortgage-rate environment, people who don't own their homes may be thinking about buying instead of renting. Here are points to consider:
Rent-related expenses usually will be less than what a homeowner would pay each month in "PITI" — principal and interest on a mortgage, property taxes and homeowner's insurance. If you rent, you should purchase renter's insurance, which is likely to be less costly than homeowner's insurance for a comparable property.
"Landlords can raise rents, but if you buy a home with a fixed-rate mortgage, most of your monthly payment - the part not including real estate taxes or insurance — won't change for however long you have that mortgage," said Glenn Gimble, an FDIC Senior Policy Analyst. It's important to remember, though, that taxes or insurance could still go up.