Home ownership is still considered the American  dream for many, but is it right for you? Here are some things you should consider when you're deciding between renting and owning.

  • What will it cost you?
    Buying a home usually requires a substantial investment of cash for a down payment, closing costs, and points paid to lenders. You may also need to buy appliances, additional furniture, window coverings, and other items.
  • What will you get for your money?
    With a home, you may possibly have a yard, a community pool or other amenities, and more space. Of course you'll also be responsible for maintaining the yard, heating, and cooling a larger space, and perhaps paying homeowner association dues to maintain the pool and other amenities.

  • Will you be free to quickly relocate?
    If your company relocates employees frequently, or you're not interested in staying somewhere for more than a year or two, you may want to think twice about buying. What happens if the neighborhood changes, crime increases, or you don't get along with your neighbors? The costs you incur to sell a home (realtor's fees, closing costs, costs to market the property) may outpace any gains in the property's value or selling price.

  • How likely is it that your life and your needs will change?
    Is your family growing, or do you have children who are getting ready to leave home or go to college? Is divorce or separation a possibility in your near future? Will there be other demands on your income or savings?

  • What return will you get on your investment?
    Most people believe property always appreciates or gains value, but that's not always the case. A change in the neighborhood or the economy can affect the value of your property. Sometimes you'll make money as a result, but you may lose money on your investment if you haven't owned the property for long. You'll also need to consider any additional money that you put into the property for improvements or upkeep while you live there.

  • How much maintenance do you want to do?
    When you own your home, you are responsible for making the repairs or hiring others to make them, being available when repairs need to be made, paying for the repairs, etc.

  • Where do you want to live, and is what you want available there?
    If you want to live close to your work or school, are homes available in that area and can you afford them? Can you find rental housing where you would like to live, or is a home you buy the only option?

  • Are there any tax advantages?
    If you itemize your income tax, you can deduct interest you pay on a mortgage, and property taxes that you pay. You can also deduct points paid to lenders in the year that you incur that cost. If you don't itemize, you won't get these deductions.

  • What will make you happy?
    Ultimately, you need to decide if you'll be more satisfied and comfortable in a home you own, or in a home you rent.