How to Tell If You Should Buy or Rent

It can be tough to decide if you should buy or rent. Here is how to analyze your situation and decide which is best for you.

Instructions

1. The first step is to accept that not everyone should own a home. Realize that there are some people who are not cut out for home ownership. Realize that there is absolutely nothing wrong with this.

2. The first question to ask is what is your FICO score. If your FICO score is below 620 then you will likely have trouble getting a good interest rate. It may be better in the long run to wait, improve your credit, and then buy.

3. The next question to ask is can you afford a couple extra hundred dollars a month. Buying a home involves significant costs. You should be able to absorb the cost of an unexpected plumber's visit. Additionally, if you have a high debt ratio you may have trouble getting the best loan.

4. Now consider how secure your job is. If your company is laying off you may want to wait. Unemployment compensation is minimal and jobs are tough to find. You do not want to risk buying a home, foreclosing, and having trouble getting another when you are ready.

5. Next think about if you are working for a large company that could transfer you. If that is the case then you may want to hold off. You do not want a situation where you will be in a hurry to sell and will possibly lose money or end up managing a rental property from another country.

6. Now think about how much you enjoy repairing things. Owning a home requires you to repair all those things your landlord did before or supervise someone doing that.

7. If after considering all of these things you still want to buy a home, then go for it because you may be ready. If not wait and think about what you really want.

Tips & Warnings

• Think about your credit

• Think about your finances

• Think about your interest in repairs

• Think about your job stability