Down Payment Articles & Advice

When Renting Is Better Than Buying

If possible, it is ALWAYS better to buy than to rent. Right? Perhaps Not.

No one will deny that owning your home is a big part of the American Dream. It is also a goal that most people, rightfully, strive to attain. Home ownership can provide substantial financial rewards, afford tremendous peace of mind, be the source of immense personal pride, and greatly add to a person's general well-being and quality of life.

Having said all that, there are still certain times, and certain situations, where renting may be a far more viable option than buying.

You Should Consider Renting Instead Of Buying A Home When:

You Know Your Time In An Area Is Very Short.

If you know, for a fact, that you going to leave an area in two years or less, than the costs associated with buying and selling real estate might not only eat up any profits gained by appreciation, but may even cause you to lose money. Having said that, a viable option might be to purchase a house you would want to hold as an investment property. When doing this, buy a house that makes economic sense for you as a future landlord, not as a home owner. This may mean purchasing a townhouse or condo instead of a single home , or it could signify buying a smaller, less expensive home.

Your Financial Situation Means You Will Be Totally Strapped For Cash.

Stretching your qualifying limits can be a good thing for some buyers, in certain situations and markets. However, generally you should avoid any scenario that places you in jeopardy of finding yourself under serious financial strain. The bottom line is this: while some buyers can qualify for a loan by moving heaven and earth, conventional wisdom shows that they probably should not. A better option would be to test the waters. Spend at least a few months living as if you had already taken on the more strenuous financial obligations a mortgage payment would create. If you can do this (without a lot of stress), than you have a win-win situation. You will have saved extra money for your down payment, or your "cushion", and you will have gained an added measure of confidence in your ability to handle increased obligations.

Your Relationship With A Co-Buyer Is Not On Steady Ground.

Here's a word to the wise. If a couple is experiencing marital problems, buying a house is probably not going to solve their issues. What it will do is complicate the divorce process, should this be the unfortunate outcome. A better option for a couple might be to use the occasion of a mutual desire to buy a house as an opportunity to sit down and work out their problems, if possible, first.

Buying a home is (or should be) one of those high points in life. It should be exciting and wonderful and full of promise. With a little advance planning and forethought, it can be all that and more.

Published: October 1, 1998

Since 1989 Dan The Roommate Man has helped 1000's of people find roommates. Need help? Contact him at 800-487-8050 or www.roommateexpress.com info@roommateexpress.com

Related Pages

Mortgage Companies - Find mortgage companies online and save on your mortgage - Sources for online mortgage companies - Save thousands by avoiding paying private mortgage insurance.

Mortgage Brokers - Shop these top lenders for comparison quotes.

Selecting The Right Mortgage - How to choose the right mortgage based on your lifestyle - Advice on the best mortgages for different phases of life, future income changes, and risk levels.

Down Payment Leverage - Avoid PMI with a two-loan strategy. How to grow your equity faster.

Online Lenders - Tips on evaluating online lenders and their offerings.

Refinance- Tips on when refinancing is the right decision - How to avoid paying points and other lender fees.

Home Loan Online - Discover the best ways to get the lowest rates - Links for checking current rates.

Loan Directory - Complete home loans directory for thousands of loan products, mortgage companies, brokers, and lenders. Search our loan directory by keyword or by category for complete listings of all things related to mortgages, home equity loans, refinance, and more.

In The News

	Web Home-Loans-Help.com