The first step in the decision-making process is to determine if you can afford to buy a home. Some issues to consider include your ability to make a down payment (generally between 5% and 20% of the home purchase price) and pay closing costs (which can be as much as an additional 5%). Are you financially ready to buy at home? Your ability to make a monthly mortgage payment is just one aspect of financial preparation. You also need a large down payment and a good credit history if you plan to apply for a loan.
There are also other housing costs that need to be considered, such as utilities, insurance, repairs and maintenance, and possibly homeowners association fees. Before buying a home, you need to consider your goals, values, needs and desires. Homeownership can offer a sense of pride, independence, and stability. However, there is greater liability than renting.
In addition to reaping the benefits, homeowners assume all the risks. They are responsible for all repairs and maintenance, and run the risk that their investment will not turn as planned if the housing market changes. Carefully examine your needs and wants, and those of your family. Your personal preparation is likely to fluctuate with your life circumstances.
Buying or renting is an intensely personal decision, which depends both on your individual circumstances and the housing market. Program your purchase around your life. It's also one of the most important financial decisions you'll make. Choosing a mortgage to pay for your new home is just as important as choosing the right home.
Your lifestyle, career, family, and future goals are your guiding forces when deciding whether to buy or rent a home. For example, some people prefer the flexibility that comes with renting. You have the opportunity to move to a different property if, for whatever reason, the current one doesn't work for you. If you prefer a nomadic lifestyle, renting is a more logical option.
Moving out of a rented home is faster and cheaper than selling a home.