Although renting gives the advantage of not having to worry about maintenance and other financial obligations associated with owning property, home ownership offers tax benefits as well as the freedom to make decisions about your home. Unlike renters, homeowners who secure a fixed-rate loan can lock in their monthly housing costs -- maintenance and natural disasters notwithstanding. Even if, in some markets, your mortgage payments would be greater than rent for a comparable property, the tax breaks available to homeowners can make the cost of owning a home lower than the cost of renting.

Prospective buyers should spend a few months investigating a community. Many people make the mistake of buying in the wrong area. If home ownership is more expensive than renting in a certain area, that's often a good sign that the home-buying market there is overheated.

Experts generally agree that you can plan on annually spending 1 percent of the purchase price of your house on repairing gutters, caulking windows, sealing your driveway, and the many other maintenance chores that come with the privilege of homeownership. Newer homes may cost less to maintain than older homes. It also depends on how well the house has been maintained over the years.

A lease with an option to purchase combines features of renting and buying. A lease option allows a renter to sign a lease with an option to purchase the property for a specific price within a certain time frame. In most lease-option situations, a portion of the rent is applied to a future down payment. This is referred to as rent credit. Institutional lenders accept rent credits as part of the down payment if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect, a copy of which must be attached to the loan application.

Lease options are most popular among buyers who don't have enough funds for a down payment and closing costs. Lease options give sellers several advantages, especially in a slow market. These include a monthly rent higher than market rent, top-market value for the property, and tax-free use of the option consideration until the option expires or is exercised. Also, the renter is more likely to treat the property like an owner.