Homeownership is a financial commitment, pre- and post-purchase. It can be very rewarding if you are properly prepared, know what to expect, and make informed financial decisions. The costs of renting or buying are varied, making it hard to tell which makes better financial sense. However, be sure to do your homework and carefully evaluate how you want to live and how much you can comfortably afford. Buying may make sense if you plan to stay in your home for at least five to seven years. It may also make sense if you the following in order:
Have reliable income, good credit, and documentation to verify your savings.
Can afford at least a 3% down payment and related closing costs.
Want a chance to build equity and be eligible for homeowner tax breaks and credits.
Have the time and money required for home maintenance and improvement projects.
Have an adequate cash reserve to withstand a loss of job, illness, or other financial setback.
Are planning on staying in your home for at least five years.