Assuming you plan to own your home for several years and can afford the payments, you will likely be better off owning versus renting. Here are some points to consider:

	Rent	Buy
Tax Savings	You might receive a state income tax renter's credit, but nothing more.	Payments towards interest, taxes and points are tax deductible.
Equity Build-up	None, unless your rent payment is lower than the cost of owning a home, and you invest the difference in a CD, stock or mutual funds.	Even if your home value remains constant, your loan balance should decrease. This results in increasing equity your property.
Mobility	Most leases are less than 1 year in duration. It is easy to move at the end of a lease. In addition, your property owner usually will not have to renew your lease, and you could be forced to move out at the end of your lease.	Selling a house can take time and may cost 6% to 8% of the sales price. If you have to sell quickly, it could cost even more. If you do not have to sell, yet must move, consider renting your house. You will probably receive additional benefits by depreciating your home for income tax purposes. Remember, buying a home makes sense if you plan to hold it for several years.
Payments	Your rent payments generally increase every year. Rent increases are often tied to inflation.	Mortgage payments on a fixed-rate loan will not change. Adjustable-rate loan payments vary according to the terms of the note and economic conditions.
Timeframe	Renting makes sense if your period is less than 2 to 3 years.	The longer you plan to own your home, the more sense it makes to buy. Some buyers with plans to move relatively soon may buy if they expect the market to appreciate significantly.

Additional points to consider in your decision include:

How much does PMI cost? The cost of PMI depends on the percentage of the down payment and the type of loan. Here are some sample PMI charges. These are guidelines only. Payment factors are subject to change. Please contact your lender or broker to get the cost of PMI on your loan.

LTV	30 year fixed	15 year fixed	30 year adjustable
95%	0.78%	0.72%	0.92%
90%	0.52%	0.46%	0.65%
85%	0.32%	0.26%	0.37%

Example: If you are getting a 30 year fixed loan, and are, putting 10 percent down, the PMI premium is 0.52 percent. If your loan amount is $100,000, your PMI payment will be $100,000 x (.52/100) x 1/12 = $43.33 per month.

FHA  FHA's Title II, Section 203(b) mortgage insurance program is the most commonly used. The program allows a borrower to purchase a new or existing one- to four-family home in an urban or rural area. The program has been essential in helping low- and moderate-income families become homeowners for two reasons. First, the program lowers some of the costs associated with obtaining a mortgage. Second, because lenders are insured against default, they can take greater risks by lending in situations, which fall outside of conventional standard underwriting guidelines. FHA charges mortgage insurance premiums for these loans. The premiums are used to pay lenders in the event of the borrower's default on the mortgage. The borrower pays an up-front mortgage insurance premium (MIP) and an annual premium. The up-front premium can be financed into the loan. The Mutual Mortgage Insurance Fund is sustained entirely by borrower premiums. Currently, the up-front MIP is 2.25 percent of the base loan amount or 1.75 percent for a qualified first-time homebuyer. The monthly premium is 1/12 of 1/2 percent of the outstanding principal loan balance. Unlike Private Mortgage Insurance (PMI), which can be canceled, FHA mortgage insurance lasts for the life of the loan. MIP is also generally more expensive than PMI. Any Unused MIP is refunded when the loan is paid off.

VA  The U.S. Department of Veterans Affairs guarantees loans made by institutional lenders to eligible veterans. The guarantee helps protect the lender in the event of the borrower's default. The VA charges a funding fee for each loan, which varies with the amount of the down payment and the status of the borrower (reservist/active duty/veteran). The funding fee may be included in the loan amount. The funding fee for veterans is 2 percent for purchase or construction loans with down payments of less than 5 percent, refinancing loans and home improvement/repair loans. The funding fee for veterans is 1.5 percent for purchase or construction loans with down payments of at least 5 percent but less than 10 percent

Home Warranties  Traditionally, home warranties have protected homeowners from repair costs that are not covered by home insurance, especially the inner workings of a home--plumbing, heating, air conditioning, and major appliances. Home warranties are often crucial in real estate transactions because they help home buyers as well as sellers rest more easily, safe in the knowledge that an unforeseen problem with a furnace won't spark a financial conflict, postpone a real estate closing, or blow a deal altogether. While home warranties are not necessary for every current homeowner, those who benefit most are those trying to buy or sell homes. When you buy a home, you assume the burden of maintaining a variety of systems and appliances. Sellers are required to disclose known problems, but cannot be blamed for passing along a washing machine or an oven that fails six months after the sale. That is when a home warranty goes to work.

What is an APR?   The APR, often referred to as the Effective Rate, is a rate, which shows the true cost of borrowing. This rate is different from the nominal (named or note) interest rate stated in your loan documents. The Truth In Lending Simplification and Reform Act require mortgage companies to disclose the APR when advertising a rate. To begin to understand the Annual Percentage Rate, it helps to understand the standard, fixed rate mortgage loan. A standard loan consists of:   Loan amount, Number of payments, Monthly payment amount, Nominal interest rate.

Given any three of the above four items, the fourth can be determined with the aid of a financial calculator, computer program or algebraic formula. In other words, given any three factors, there is only one correct fourth factor. Here is an example of a fixed rate loan:

Let us consider a simplified, real estate loan transaction, using the above loan as our starting point. You borrow $100,000 and pay a 1.5 percent loan fee to the bank. For this example, that is the only fee you pay. At the completion of the transaction, how much money do you have? $100,000? No. You have $100,000 less the $1,500 loan fee, or $98,500.

Taking into account the cost of your transaction, let us take a second look at your new loan.

Remember, there can be only one correct interest rate given the other three factors. In this example, the interest rate is the APR--9.17 percent. Since the loan amount was effectively reduced (you did not get $100,000), and the number of payments and monthly payment stayed the same, the interest rate had to increase.Fundamentally, that is all there is to the APR in a real estate loan transaction. This simplified example recognized only one fee related to obtaining a loan. You will incur many other costs when obtaining a loan, some effecting the APR, some not, but the principle is the same.

Theoretically, the APR is a number you can use to accurately compare loans among different lenders. Since the APR takes into account costs of obtaining the loan, you should be able to use APRs to find the best loan. Unfortunately, when calculating the APR, not all lenders include all fees, and some lenders may include fewer fees than another lender. What is a borrower to do?
Ask for a signed and dated Good Faith Estimate of Closing Costs (GFE). A properly prepared GFE will itemize all the costs associated with your loan. Only then can you accurately compare lenders' programs.

What fees are included in the APR?

The following fees are usually included in the APR:
Points - both discount points and origination points
Pre-paid interest. The interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations. However, companies may use any number between 1 and 30!
Loan-processing fee
Underwriting fee
Document-preparation fee
Private mortgage-insurance
Appraisal fee
Credit-report fee

The following fees are sometimes included in the APR:
Loan-application fee, Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death)

The following fees are usually not included in the APR:
Title or abstract fee, Escrow fee, Attorney fee, Notary fee
Document preparation (charged by the closing agent)
Home-inspection fees
Recording fee
Transfer taxes