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(MCT)—Renters often hear jeers that they’re paying somebody else’s mortgage.

They feel pressure to escape rent increases and take advantage of low home prices last seen a decade ago.

But a home still may be a stretch financially. And prices may decline further, embittering new owners who see their prized asset lose value.

For most, the decision boils down to whether their jobs are stable, how much savings they would have after buying, and how long they intend to stay in the area.

Housing industry experts weighed in on the rent vs. buy debate in three hypothetical case studies:

Scenario One: A police officer making $60,000 a year, newly married, currently renting a two-bedroom apartment for $1,500, never owned a home before.

Jim Flood, regional manager for Supreme Lending in Boca Raton, Fla., says he’d work with the officer to determine his cash position.

A new homeowner still should have at least two to four months’ of cash in savings after buying, Flood says. Assuming he has the appropriate savings and his job is safe, the officer is a good candidate to own, Flood says.

If he put down 3.5 percent on a $150,000 home and had an interest rate of about 4 percent, his total monthly payment (principal, interest, taxes and insurance) would be roughly $1,100—a savings of $400 from what he pays in rent.

Bottom line: Easy call. Buy.

Scenario Two: Recent college graduate, living with her parents, monthly payments of $300 for a car and $400 for student loans, has minimal savings and a $40,000-a-year job, but is willing to relocate for another.

The car and student loan debts are the biggest obstacles to buying, Flood says. She’d have to buy a small home or condominium, but she’s likely better off staying a renter.

“If it was my daughter, I’d tell her to pay off the car or student loans and save more money for a rainy day,” Flood says.

Randy Bianchi, co-owner of Paradise Properties of Florida in West Palm Beach, Fla., agrees, adding that the uncertainty over how long she’ll be in the area is another concern. Plan to live in a home you buy for at least five years, experts say.

“Homes are cheap right now, but owning will tie you down,” Bianchi says.

Bottom line: Stay with parents or rent cheaply.

Scenario Three: Retired couple in their mid-60s, small pension, just sold their house for a $15,000 profit, looking to stay in the area and downsize.

The major factor here is the modest profit on the home sale. It’s not enough to buy another home or condo outright or to significantly pay down a mortgage on a new place, said Michael Citron, a real estate agent in Broward County, Fla.

The couple likely would spend $1,200 to $1,500 a month on a mortgage and association dues, but probably only about half that amount if they moved into a 55-and-over rental community, Citron says.

“That’s much more manageable for them,” he says. “The lawn is taken care of and they can call maintenance if anything needs to be fixed. They just don’t have enough money to buy a home.”

Bottom line: Rent.

©2012 the Sun Sentinel (Fort Lauderdale, Fla.)
Distributed by MCT Information Services