Is It Better To Rent or Buy

Will you Own or Rent 20 Years From Now

- Use the Freddie Mac calculator to help you make a decision! -


Is it better to rent or buy? A topic with no concrete answer, because it is not all based on finances and not the same for eeveryone. While finances and credit play a significant role,  your longterm goals should not be overlooked. We will provide you with Some important questions to considered before deciding if buying or renting is best for you.

1. WHERE ARE YOUR GEOGRAPHIC CONSIDERATIONS - Geographic location is very important to everyday life. The world around us affects every fiber of our expectations on many levels and these expectations change as we approach retirement. If you are presently living in New York City, which is hectic, clustered and fast paced, you might want to slow it down a notch in retirement. Therefore, New York City would not be an option to buy a home if retirement is around the corner. On the flipside, If you are 10 or more years from retirement, buying a home now will give you a chance to build up equity, while paying your own mortgage rather than pay a landlord.

2. CAN YOUR RETIREMENT INCOME PAY RENT OR A FIXED MORTGAGE - The next thing to consider is how much of your income you want to spend on housing expenses. This will help you to analyze your housing options. Should you buy a condo, co-op, single family, multi-family or rent. It will also determine if you can afford to carry the debt of a mortgage payment.  Buying may not make sense if your plan is to apply for senior citizen housing, which is subsidized and offered to seniors at a reduced rate.  It is considered risky to spend more than 40% of your available income on rent payments. Therefore, rather than opt to not buy, it might be worth considering a multifamily home. The rent payments are a great contribution towards your mortgage payment, and after the loan is paid off, will supplement your income nicely.

3.  WILL IT BE CHEAPER TO BUY OR RENT - First, let's use Freddie Mac's Calculator to zero in on what your finances suggest is best for you. Do you agree or disagree with the results? Even though research shows it is better to buy than rent it's not that simple. If you have a small family and need nothing more than a 1 bedroom or studio, the savings realized from buying a home might not seem significant. For example, after calculating the scenario on a 7 year home purchase the client saw savings of $43,000. Sounds great right. But lets divide that by 84 months and the $511 monthly savings is not a big deal. Divide that even further by 30 days and you have to ask there an easier way to save $17 a day. The bottomline is that the decision to buy a home in the short term should not be based solely on finances, if your plans are to live in the home 7 or less years.  Use the rent or buy calculator on this page to get an easy answer, then give us a call to discuss it further.

5. WHY RENT WHEN YOU CAN AFFORD TO BUY - A lot of folks consider this the holy grail in making the decision to buy or rent and can you blame them. I have a simple formula if you are only concerned with the math. If your proposed mortgage payment would be the same or less than renting, you should seriously consider buying a home. If the math clearly shows it's better for you to buy than own, contact a loan officer to discuss your options. The decision to buy a home also requires your banker to verify you have: good credit, documentation to verify finances, and savings,  at the conclusion of which once everything checks out, a pre-approval will be issued.

The benefits of owning or renting is not the same for everyone. Think long and hard before making the decision. It should not be based upon calculators or external influences. Be sure to consider your short term and long term goals long and hard before making a final decision. If you decide to rent or buy and need additional information please contact Citywide Housing Services online, or at 914-299-0420 to discuss your decision further.

The rent or buy module on this page is the property of Freddie Mac. The staff at Citywide Housing Services does not represent Freddie Mac products or services and is not authorized to represent Freddie Mac in part or whole on any matter. Please contact Freddie Mac directlly with any questions about their services, products or programs.

Comments ( 2 )

  • Antoine parker

    hi i’m seeking an apartment i have a $1,214 voucher via seps program .. they are willing to pay 15% annual rent brokers fee and 4 months rent upfront .where should i be looking or speaking to.. any help or guidance in the right direction would be greatly appreciated …

  • Jasmine epps

    Looking for a landlord or management who acxepts the linc3 voucher

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