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Many individuals believe that it is ultimately more beneficial to spend money on buying a home rather than spending years paying rent. However, that is not always the case. There are a lot of factors to consider before making your decision and every situation is not the same. Here are a few things to think about before choosing the best option to suit you.
Mortgage and Loan: Buying a house naturally requires money, and in most instances requires the individual(s) to apply for a loan or mortgage. You need to first know whether you are able to obtain a loan or mortgage, if not then renting would best suit you. Factors such as poor credit score and low income will decrease your chances.
Employment: Be sure that you have a safe and secure job. If you feel that any day in the near future you may be fired, or you plan on quitting your job then home ownership is probably not the right decision. The loss of a job can bring many financial difficulties that buying a home will just make even more difficult.
Total Cost: You need to analyze which option will cost you the least amount of money in the long haul: monthly rent compared to monthly loan payment, and all other costs attributed to each option. This includes maintenance and repair of the building. This is one of the main costs of buying a home which does not factor into renting. Whichever decision saves you the most money should be highly considered.
Change in family structure: If you are single and plan to remain that way, renting may be a practical option. However, if you plan to get married and start a family, a stable home where memories can be made and roots laid-out is essential. Your own provides security and a sense of belonging to your family that renting does not provide.
Future Plans: Buying a home is a long-term investment and should be treated as such. If you are someone who is always on the go constantly traveling from place to place then it might be more beneficial to rent in the meantime. Worst yet if you plan on spending time abroad for a long time then buying a home may just be pointless.
Freedom v. stability: Renting gives you a sense of freedom if you like to change scenery often by moving to different locations. In addition, with renting you have the freedom of moving if you do not like the home or the area. However, there is uncertainty with renting. The landlord is within their right to discontinue your lease, and you would be forced to move in that situation.
Are you at the point where you need to decide between renting and buying? Which do you think better suits your situation? Is there any advice you can provide to someone needing to make that decision? Share with me in the comments.