Rent or buy government homes: weighing the options

When choosing whether you want to continue to rent or buy, government homes offer an opportunity to get a property at a price below market value.

When you are looking for a new place to live, you have plenty of options. You can rent or buy a home. When choosing whether you want to continue to rent or buy, government homes offer an opportunity to get a property at a price below market value.

First, decide if you want to rent or buy. The main benefit of renting is that it's an easy and a very quick process. Once you are approved for a place you like, you pay advance rent and a deposit and you have a home.

Buying a home is a far more time-consuming and complicated process. You need to get pre-approved for a mortgage, hire a real estate broker and then look at numerous properties until you find the right one to buy. Then you have to negotiate the sale, schedule a closing and finalize your home loan. This entire process can take several months. If you've decided not to rent, but to buy a government home, you may also have to go through a bidding process with the U.S. Department of Housing and Urban Development ( HUD ).

If you don't have a lot of money to buy a home, you can buy foreclosed homes that are below market value. HUD has many foreclosed properties for sale. These government homes are available to both home buyers and investors, but you get priority if you plan to live in the home verse rent it. These foreclosed homes are sold in as-is condition and therefore may be in need of repair. However, you can get a Federal housing Administration (FHA) loan that allows you to borrow the amount of the home and the cost of repairs in the same mortgage.

When the choice is either to buy vs. rent, the right answer really depends on your personal financial situation. Even if you get a discount on a HUD home and an FHA loan, you still need 3.5 percent of the home price as a down payment. Plus, you should have some savings to cover unexpected expenses. If you think you are ready to buy, click here to get free foreclosed homes listings from RealtyNow.