So, should you buy or rent? Here are some questions to ask yourself.
How long do you plan to be where you are now?
This is a very important question. If you and your family do not plan to stay where you are longer than 3 years, you would be better off renting for now according to most experts. If you are not sure, the pointer still leans toward renting. If you are committed to at least 3 to 5 years or more, it’s probably in your interest to investigate buying.
What are your finances like?
This question is not in the wrong place. Most experts say tenure is the most important factor when deciding between renting and buying. Your ability to finance a home purchase is critically important but there is such variability when it comes to financing options, it’s more important to know whether you will be in place long enough for finances to matter.
What is the state of the housing market where you live?
All real estate is local, just like politics. If you live in Indianapolis, the lack of affordable housing in San Francisco isn’t important to you. The same applies to everything from interest rates to flood insurance to cost of construction. Examine availability, prices, interest rates, even housing regulations where you live. If everything checks out and you are otherwise ready to buy, go for it.
What about job security and satisfaction?
One last thing. If you like where you are but hate your job or, worse yet, are unsure about your continued employment, you may want to focus on that before considering settling down. If employment isn’t an issue because you’re retired or independently wealthy, this question doesn’t matter. There are several reasons this question might not be a major concern. There may be plenty of other jobs available. You may be near retirement. You may be willing to stick it out for at least 3 years—remember, under most conditions that’s all you need.
Consider your answers to these questions before deciding. Not much in life is all one way or the other. You may not be 100% sure you will be where you are in 3 years, but who is? Your financial situation may seem precarious to you but not to a loan officer. Conversely, you may think you’re in great shape but haven’t considered something you didn’t know was in your credit report.
Ten Points to Consider for Buying
- Building Equity
- Stable Housing Costs
- Tax Benefits
- Customization and Personalization
- Long-Term Investment:
- Sense of Community
- Access to Amenities
- Potential Rental Income
- Pride of Ownership
- Growing Economy
