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How to decide whether to rent or buy a home

There is a lot of talk in Pennsylvania and the rest of the United States regarding whether or not it is a better market for renting or buying. Most experts now recommend renting because it is cheaper. However, for those who can afford it, building equity may be better than paying someone else’s mortgage.

According to Fidelity Investments, there are a few things potential buyers should keep in mind when deciding if renting or buying is right for them:

  •          Predictions for house prices to climb higher
  •          The length of time the buyer plans to spend in that location
  •          How the recent changes in mortgage interest deduction may affect tax liability

Wells Fargo also weighs in on the question of whether or not people should purchase or rent their homes. One of the key benefits Wells Fargo points out is that buying offers more stability than renting. The bank also asserts that a home is an asset that builds equity over time. While not specifically mentioned on this webpage, homeowners can rely on that equity to take out a line of credit should they ever need it.

The bank also cautions potential buyers to consider whether or not they can meet the upfront financial commitments. These include not just the down payment but closing costs. They will also need additional money for hazard insurance and property taxes. Finally, potential buyers need to keep in mind that, unlike when renting, they are responsible for all maintenance and repairs. The good side to this is that maintenance and repairs may add to the property value for resale.

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