Housing values are finally dropping to the point in which itmay be cheaper in some areas to actually purchase rather than rent.  Make no mistake, this is a good thing.   It was scary enough with house values so farabove the cost of renting.

When factoring the true house payment you must take allfactors into consideration.  When you payrent it is reasonably cut and dried.  Youmake a rent payment to your landlord and either you or the landlord paysutilities. 

What's good about this is it is nice to have this no braineras a comparison.  When factoring yourhouse payment it will be very much determined by the sale price, down paymentand the interest rates of the day.

Also, you will need to pay for property taxes andinsurance.  Some states have painfullyhigh property and insurance rates whereas others are very light.  Your mortgage company will generally splitthe tax and insurance payment up into 12 equal parts and you will make thispayment to your mortgage company every month along with the principal andinterest payment on the mortgage.  Once ayear your mortgage company will pay your insurance company and twice a year itwill pay the county property tax.

The last factor is to determine how much money you will saveon your taxes each year for the property tax and mortgage interestwrite-off.  Let's say you determine youwill have a $1,500 mortgage payment which includes principal, interest, taxes,and insurance (PITI).  Let's compare thatto a $1,200 rent payment.  Let's assume everymonth you can write off a total amount of $1,200 for taxes and insurance, andyour are in the 25% income bracket. 

That means you will pay $300 less every month in taxes thanyou are currently accustomed to paying. This means your rent and mortgage payment are exactly equal.  Your rent is $1,200 per month and yourmortgage payment after your tax deduction is $1,500 minus $300 = $1,200 permonth.

Consider these items when comparing renting to buying.  Times are changing for the better.