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First time buyers have a lot to consider when making the decision to rent or buy a home.  Interest rates are still at all time lows.  There is a lot of housing inventory to choose from and prices are at the lowest they have been in years.  However, deciding whether to buy or rent can be a complicated decision.  How do you know what is right for you?  Potential buyers should ask themselves key questions before making this important decision:

1.  What will my payment be?  Keeping mortgage payments under 30 percent of your income is a good rule of thumb.  Or your mortgage can

be 25% more than your rent since interest can be written off as a tax benefit.   In this calculation, rent of $1200 equals a mortgage of $1500 a month. 

2.  What other fees will you have?  Owning a home means you will have to pay for property taxes, insurance and maintenance.  When renting, the landlord pays these items for you.

3.  What other debt do you have?  Add in other debt you have from credit cards and car payments.  Total debt per month should not exceed 46% of your monthly income.

4.  What is your credit score?  The impact of a credit score on your interest rate could be significant.  A high credit score qualifies you for a better interest rate and indicates strong credit worthiness.  A lower interest rate means a lower house payment.  Maxing out credit lines and paying bills late will lower your credit score.  If your score is low, you may wish to delay buying and improve your score.