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Purchasing a home is a large investment. Not all people are ready for the costs associated with buying a home. For some, renting a home may make more sense. Here are some pros and cons to help you make an informed decision.

Pros of buying a home vs. renting One of the largest incentives for buying a home vs. renting is the equity that you put into your house. When you buy a home, you have the opportunity to gain a profit on the sale of your home sometime in the future. Hopefully, you would be selling during a robust real estate market, and will be able to sell your house for more money than you paid for it. When you buy a home, you have more options when it comes to painting, adding-on rooms and even renovating to your taste. If you are considering buying a home, be sure to do some preliminary research to be sure that you can afford it. Check your credit score and pay down debts that you have. Buying a home is considered the American Dream. Many people want this dream to come true.

Cons of buying a home vs. renting For some people, renting a home makes more sense. If you plan to live in a home for only a short period of time, you probably won't see much of a profit when you sell. It may make more sense to rent a home for now. Some people may have credit scores that are too low. Since this is a large factor that financial institutions use to determine their risk factor, you may find that you will have to put a large sum of money down, or the payments will be too much. If you have too much debt, you may not be able to qualify for a loan. It is best to work on paying down your debt before looking to purchase a home. Another point to consider is your job stability. Do you feel that your position within the company you work for is stable? If the company is showing signs of possible distress? If so, renting may be a better option for you.

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