To buy or to rent? What will save you money in the end?According to an article by Forbes Magazine, national findings have shown that buying is now 38 percent cheaper than renting (depending on the mortgage you choose).How much cheaper? When Forbes gathered their recent data from Trulia’s ‘Rent vs. Buy’ report, they found that if someone buys a home with a 30-year mortgage and puts 20 percent down, buying a home in the same area is 38 percent less expensive than renting. On top of that, comparisons from recent years show these savings are increasing. The article cites two reasons for these cost-savings: 1.) Interest rates in 30-year fixed-rate mortgages have decreased from 4.8 to 4.3 percent 2.) With many past homeowners still trying to shake a recent foreclosure, these families are left with no option other than to rent. Plus, after the 2008 crash, restrictions have tightened and many people have chosen to stay out of the real estate game altogether. The effect? A higher demand for rental properties = a higher monthly rent. It’s as simple as supply and demand. While these rent versus buy findings are based on a 30-year fixed-rate mortgage, with a 20 percent down payment, all at 4.3 percent interest, and a plan to stay in the home for 7 years; the math does change slightly depending on which type of loan a homeowner qualifies for.How to stretch your dollar the farthest? This study broke down the different mortgage options to include the traditional 30-year fixed-rate loan with 20 percent down, an all cash payment for the total value of a home, a 15-year fixed-rate with 20 percent down, a 10 percent down payment with private mortgage insurance, and an FHA loan with a 5 percent down payment. While the savings outcomes for each of these options changed in the study, there was one resounding finding – depending on the area, no matter how you slice it, renting is more expensive than buying. How does the loan and area affect the outcome? For those looking to buy in Honolulu, for example, it may be cheaper to rent than to get a home with an FHA Loan. This study also showed that if you choose to live in San Francisco, New York, or Los Angeles, the cost savings of buying could be miniscule compared to staying in your rental. However, if you’re looking to invest in the Midwest or South then according to this study, you should really consider buying – no matter the loan type.What to do, what to do?If you’re on the fence on whether or not you’re interested in investing in real estate, the best place to start is to schedule a meeting with a mortgage professional. With tighter lending restrictions, pre-approval is a prudent first step to find out if you can financially handle a mortgage. This step will offer clarity as far as your options and whether or not homeownership really is the best choice for you. For more information about getting pre-approved for a home loan or to get a better idea of the mortgages available, feel free to contact one the Housing Buzz team today.