A home is one of the biggest financial commitments most of us will ever make — so it’s understandable that we might get a little stressed over what seems like a straightforward question:
Should I rent or buy?
To try and ease that anxiety, we spoke with a mortgage expert and a certified financial planner to get their take on when buying a home is in your best interest.
While there’s no universal “right” answer, start your decision process by asking yourself these five questions:
1. Can you afford it?
Rent if: You don’t have the money saved to buy and carry a home.
Buy if: You’ll have the cash to cover the initial transaction, plus the ongoing costs of homeownership.
2. Are you financially secure?
Rent if: You can’t check off one or more of the above bullet points, or if buying would completely wipe out your savings.
Buy if: You’re financially secure outside of your home savings.
3. What are your other financial goals?
Rent if: You’re currently prioritizing other financial goals above homeownership.
Buy if: Homeownership is your primary financial goal, and you’re both aware of and comfortable with how the cost will affect your progress towards your other goals.
4. Are you willing to be the super?
Rent if: You want someone else to step in when things get complicated around the house.
Buy if: You don’t mind dealing with the increased chores that come with being your own landlord.
5. Where do you see yourself in the near future?
Rent if: You’re unsure where you’ll be in the near future.
Buy if: You expect to be in the same place for a few years and want to own your home.