decision to buy or rent, but it’s an important one. Do you move a lot? Do you travel a lot? Have you found the city, area, and neighborhood in which you’d like to stay? What about appreciation? Typically, it takes about four to seven years to “break even” on a home purchase (this means that there’s been enough appreciation to pay back the cost of the transaction and ownership). So, for example, if you’re thinking about buying a home and selling it within one to three years, it won’t be worth it. You’re better off renting until you know you’ll be staying put for a while longer. Homeownership is a significant financial commitment for which buyers must be prepared. You’ll need to consider the overall price of the home, the down payment, closing costs, mortgage payments, maintenance costs, property taxes, homeowners’ association fees, and more. You can’t simply compare a month’s rent to a month’s mortgage payment. You must be prepared for all the costs of homeownership. • Down payment: The down payment refers to the lump-sum payment that funds your equity in the property. The amount varies, but in the U.S., 20% of the purchase price of the home is generally the norm, the preferred amount, and what will get you the best rate. • Mortgage payments: A monthly mortgage payment includes both interest as well as loan principal, and generally, any homeowner’s insurance and prorated property taxes. Some monthly mortgage payments ARE YOU FINANCIALLY PREPARED?
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