Good Question: Several factors affect choice to buy, rent

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Question: I'm considering moving from my current apartment. Is it better to rent or buy a home?

Answer: Homeownership is a big responsibility and a big commitment. Whether or not you should buy or rent a home depends on your financial stability and several other factors.

First, are you financially able to buy a home? Is your income and credit good enough to be approved for a mortgage? Check your credit report ( and see if there are any issues you need to take care of before applying for a mortgage. The better your credit, the better the interest rate you qualify for will be, and that can save you thousands of dollars over the life of the loan. If your credit needs some work, it might be a good idea to consider renting and spend a couple years working to improve your credit rating.

Before buying a home, especially in today's real estate market, it's important to consider how long you will remain in the area and the home. Sometimes a quick sell for a job transfer or new opportunity isn't that easy to accomplish. If you're unsure how long you'll be living in the area, it's best to rent and not incur the costs associated with homeownership.

Buying a home means additional responsibilities.

Almost always there are maintenance requirements with homeownership. If you're not prepared or not interested in cutting the grass, keeping up with landscaping or home repairs and you can't afford to live in a community where those things are taken care of for you, then buying a home might not be the right decision for you.

There are benefits to homeownership as well.

Usually, the value of the home will increase over time, which means if you ever decide to sell, you should be able to get more than you paid for it. However, that's not always the case.

Owning a home also has a tax benefit. Homeowners can claim their mortgage interest on their income taxes. Also, most mortgages are at a fixed rate, so your monthly payment is the same, allowing you to always know what your housing cost is. In addition, as you pay your mortgage, you're building equity. You can usually borrow against this equity.

Finances aside, the decision on whether or not to rent or buy a home typically ends up being a personal one. If you are financially stable, confident in your employment status and location, and ready for the added responsibility of homeownership, then buying a house might be the right decision. If you're not planning on staying in the area and not interested in maintaining a home, then renting is probably a better option.

Either way, it's best to be financially prepared no matter what future housing plans hold. If homeownership is your goal, work on your credit and make sure you can qualify for the best interest rate possible. If you're content to rent, make sure your budget is in order and can handle any influxes in your monthly rent payment.


Heather Murray is manager of education and resource development for advantage credit counseling service (dba Consumer Credit Counseling Service). For more information about the agency's services, please visit, or to access the free online budgeting tool go to If you have money or credit management questions, you can email Ms. Murray at Please provide your name, address and daytime telephone number with all inquiries. Ms. Murray tries to reply to all inquiries but, because of the volume of questions she receives, cannot always respond.


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