Home ownership almost always has financial benefit over renting in the long run, especially when you decide to live in a permanent location. The biggest advantage of home ownership is your mortgage payments are an investment. You can expect the equity in your home to increase over time as your mortgage is paid down. In contrast, you will lose the money you pay for the rent forever, and the rent can be increased every year.
In some situations, renting can be beneficial. There are cases where owning is not always the best option. One of the main reason of owning a home is to settle in one area, but because of work or for some other reasons you are not ready to settle, then owning a home can be a burden to you. Owning a home is a long-term commitment. Once you own a home, you have to pay monthly mortgage, different expenses as well as maintenance cost for your home. At the same time, if you don’t buy a home, you can have other options like renting a house or an apartment, or even share with your family. Also, you can change the location easier if you don’t own a home.
If you fall in any of the following cases, perhaps you should wait a little longer before buying a home:
Financial Difficulties: You don’t have stable income or you are in debt with high interest. Although it is required only five percent or even zero down payment in some cases, you need to have the money to pay monthly mortgage and other expenses.
Living In Transition: You are not ready to stay in one place and want to relocate easily or plan to travel in a long period of time.
Job Security: If your jobs are not permanent, you may have to sell your home to accept a new job in another city. You will also find difficulty to borrow money from the bank in this case.
Bad Real Estate Market: If home values are in rapid decreasing trend, or if home values are too high compared to their true values, it is probably better to wait until the market cools down to buy a home.
Uncertain Needs: When you decide to buy a home, it is important to know the types of houses you need. For example, if you are sponsoring your family but you buy a condo with one bedroom, then when your family unite and live with you, you may have to sell the condo and buy a bigger home. Usually, buying and re-selling a home in a short time is not beneficial. You might lose money even if the home price somewhat increases because you have to pay land transfer tax, commissions, legal fees, moving and other expenses.
