Should you Buy or Rent? Tips to Help - USN

That age-old question is coming up again: rent versus buy? The foreclosure market has been growing considerably in recent years, as the rate of default and supply has increased, causing housing prices to fall. If you have good credit and a reasonable down payment saved up, you might be asking yourself if you should buy. The American Bankers Association offers a few tips to help.

Money and Business
June 18, 2008

The American Bankers Association suggests that consumers ask themselves the following five questions when deciding whether to buy or rent property: 1. What will monthly costs be, and can I afford the payments? Keeping mortgage payments under 30 percent of your gross monthly income is a good rule of thumb. If you can't keep mortgage payments to less than that percentage, you may be better off renting for awhile.
2. What other debt do I have? Total rent or mortgage payments plus credit obligations should not exceed 35 to 40 percent of gross monthly income.

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