By Nicole Goodkind

Deciding whether to buy or rent a home is one of the most difficult choices that anyone has to make. There’s a lot to consider, and the costs and benefits of renting versus buying are complicated. But don’t worry– we’ll break it down for you and leave you saying “Now I Get It.”

Maybe you’re ready to move but you’re not sure if you should rent another place or take the plunge and buy a house. The first thing you should do is compare sale and rental prices in your community. And don’t just look at the sticker price. When you buy you’ll need to factor in your mortgage principal and interest payments, homeowners insurance, property taxes and how long you plan to stay in your home. You will also want to budget 1-3% of the cost of your home each year for repairs and updates.

Seem overwhelming? It can be. But that’s why we have the internet. There are plenty of calculators online that will do the legwork for you and tell you what the real monthly payments on a home will be.

If your neighborhood is up-and-coming and home and rental prices are steadily increasing, you might take that as a sign that now is a good time to buy there. But remember, there’s no way to tell with certainty that your home will go up in value so don’t rely on that too much as a factor.

Next you’ll want to ask yourself what your five-year plan is. If you want to change careers or make a move across the country, renting may be the more viable option. If you plan on starting a family you’ll also want to take that into account while looking at homes.

Finally, take a look at your savings and credit profile. You’ll need cash on hand for a deposit, down payment, and closing costs if you decide to buy– that’s quite a bit of money. For the lowest possible mortgage rates, you’ll need a credit score of 740 or higher, but if your score is below 640 you’re going to have trouble getting any mortgage at all. If you rent you’ll probably need to pay the first month of rent and a security deposit up front.

By now you should have a good inkling of whether renting or buying is best for you — but don’t be afraid to reach out to a realtor or lender if you have more questions, they’re here to help you.