A PLATE OF THIS A CUP OF THAT: WANTED WEDNESDAYS

"decisions,

decisions"

Youve reached adult hood and it's now time to leave the nest. You start out with a shared apartment with a roomate or two which is an experience in itself but you remind yourself this is just to get started. You land that ideal job with just the rught salary for you to be able to afford living on your own. Here comes your decision point. On one shoulder youve got one conscious in your ear saying rent an appt. You cant afford to own your own. On the other shoulder youve got your other conscious saying "rent", why not just own!!!! Dont pay a monthly fee thats leads up to nothing.

Where everyones financials are on variable levels and a lot seem to beg to differ about how smart it is to look for a home to own versus renting where your paying monthly. A large group of people feel in this economy it is a financial waste to rent and instead look to being able to call your home yours. We'd like to take a look at the costs that HOME OWNERS pay versus RENTERS where the decision to rent is actually the smartest choice.

1. Closing costs and real estate fees. You will never get the full market value of your home when you sell. In addition to having to pay for the privilege of a mortgage through closing costs and legal fees, both realtors also expect a commission. While that commission can vary, you can generally count on paying 6% total — meaning a $200,000 home sale would generate a $12,000 commission total for the realtors. Right there, you’ve saved yourself a great deal of money by renting.

2. Mortgage interest. The amount you will pay depends entirely on your interest rate and the length of your amortization. If you’re lucky enough to get a low rate, have at least a 20% down payment saved, and you only plan on having a 15-year mortgage, as we did, this cost is relatively negligible when you compare it to the benefits of owning a home. But if you’re unable to qualify for a good interest rate, don’t have much saved, and plan on paying for 30 years because you cant refinance into a shorter loan period, that interest could really bite you. If you are hoping to buy a home eventually, it does make sense to wait until you are able to qualify for the best possible rates and have a sizable down payment in the bank.

3. Property taxes. No matter how long you live in your home, or how quickly you pay off your mortgage, you will always have to pay property taxes assessed on the value of your home. As your home’s value changes, your property tax will also change. Property taxes are an important way to pay for such local needs as schools and local government. But these taxes can be very high depending on where you live. Let your landlord pay the property taxes while you are saving your dollars.

4. Maintenance. One of the things I miss most about rental living is care-free maintenance. Back in my rental days, I could give a quick ring to the building manager if there was a problem, and have someone deal with any issue within less than 24 hours. Now, when the water heater implodes, or the drains stop draining, or the refrigerator decides it would prefer to keep food at room temperature, my husband and I are the ones on the hook for fixing or replacing things. If you don’t have money set aside for dealing with repair and maintenance issues, these kinds of surprises can take a big bite out of your monthly budget.

5. Homeowner’s insurance. Everyone should carry insurance on their property. But renters get a financial break here, as well. Since renter’s insurance only covers the property you own within your rental unit — and you are not responsible for insuring the structure of the building in which you live, like a homeowner would be — you pay a great deal less in insurance premiums than do your home owning neighbors.

~apartments~