In a post last year called Rent or Buy, we mentioned how buying is the better option over renting. The scenario presented made a lot of sense with the source pointing out that you will end up spending about the same amount of money on your mortgage as you would on rent plus all other expenses if you live in one place for about 3 years. With that, it was concluded that it would be better if your money at least went towards mortgage payments.
While the math adds up, what you should realize is that sticking to just renting may still be the better financial decision for you. This advice is for wanna-be home buyers who are just not financially healthy enough to make long term financial commitments. This includes people who do not have a steady source of income, have nothing in saving, and those currently in debt. After all, even if you diligently pay your mortgage for 3 years, the house can still end up foreclosed if you lose your job. This wouldn’t be too bad and will just seem like you paid rent for 3 years if it didn’t leave you saddled with a huge unpaid balance on your mortgage.
So always take into consideration your specific circumstance before making decisions when it comes to something as big as buying real estate.
Image via Images of Money