Deciding whether you should buy or rent your home can be a tough decision. What’s best for you depends on a lot of different factors. Here are some important things to consider before you decide to buy or rent.
There is a much larger expense involved in owning a home than the cost of your mortgage. Consider how much you can expect in ongoing costs as well: repairs, renovations, insurance, property taxes, and so on. If you have plenty of extra income to deal with these expenses, buying can work well for you. But, if you are living on a limited, fixed income it’s better to rent, as you’ll have a lot less unexpected expenses to deal with.
If you’re thinking of buying a house, be realistic as to how much space you really need. For a couple with no children, a small house will do just fine and be easier to maintain. A bigger family, on the other hand, should buy a house large enough to meet their needs and have space to spare if more little ones come along. A single person who doesn’t require much space is often better off renting an apartment.
Before investing in a house, think about if you’re truly settled and stable in the area. Can you see yourself still living there 20 or 30 years down the road? Buying is a pretty safe bet if you or your partner have a stable job that won’t require you to move anytime soon. Buying is also a pretty safe bet if you’re close to retirement. If you’re not sure where you’ll want to live a few years from now though, it’s better to rent then to risk getting stuck in a long term mortgage.
Credit History is a big one. If you have good credit history and aren’t in a lot of debt already, you are likely in a position to be able to pay off a mortgage. However, if you have poor credit history or are loaded down with debt, adding an even bigger pile of debt on top of that by buying a house is a bad idea. It’s better to rent for now until you’ve lowered your debt load.
Depending on your situation, there are advantages to buying and renting. Use the advice above to help you make the choice that’s right for you.