The American dream of home ownership has been written into the fabric of American life for as long as America has been a country, but the fact is that owning a home isn’t the right move for everyone. There are some situations where home ownership would be much more costly than renting and, for that reason, should be avoided until the situation changes. Read about them below. Enjoy.
Reason #1: You don’t have regular, steady employment. If you don’t have a steady job it’s very difficult to know whether you’ll be able to pay your mortgage payments next year, or in five years. Even though you might be “making good money” right now, if that situation were to change and your income dropped, you might be looking at some dire financial difficulties. If you’re renting it’s much easier to “downsize” than if you own a home and so, unless you have steady employment and a steady paycheck, purchasing a home might not be your best move until you do.
Reason #2: You move frequently because of your job. If you move around a lot because of the work that you do, purchasing a home is probably not the best idea because of all the extra costs that are involved with buying and selling, including closing costs, real estate agent commissions and so forth. In most cases it only makes sense if you stay in a home for 10 years or more and so, if you move a lot for work, renting is probably a better idea until you finally “settle down” in one location.
Reason #3: The apartment you are renting is an excellent deal. Depending on the city you live in, and the apartment you’re renting, you might have a situation that meets your needs quite nicely. In most larger cities the apartments are rent-controlled or rent stabilized, meaning that your rental costs will stay the same over several years, if not decades. If you like living in the city, and you have a rent-controlled apartment already, you might consider staying there until the time comes that you want to “escape” to the suburbs.
Reason #4: You don’t have a lot of savings. Yes it’s true that you can purchase a home these days without a large down payment, but that doesn’t make it your best choice or a good idea. If you get an FHA mortgage, for example, your mortgage payments will be more expensive and you’ll also be forced to get FHA mortgage insurance, which can add a tidy sum to your monthly mortgage bill. Simply put, it might behoove you to wait until you have a substantial enough amount of savings to put down at least 20% in order to avoid mortgage insurance as well as have enough savings in the bank to cover emergency costs if necessary.
Reason #5: You enjoy a life of simplicity. Let’s face it, owning a home comes with a lot of extra chores. When something breaks, you have to fix it. There are home maintenance duties including painting, lawn mowing and other chores that need to be done regularly. There are also taxes and HOA fees to be paid, neighbors to deal with and so forth. When you rent an apartment, many of these extra tasks and problems fall away and, for that reason, if you enjoy living a simpler life, renting might be better for you.
So there you go, 5 excellent reasons to not purchase a home. Depending on your situation, your lifestyle and your preferences, all 5 might make a lot of sense to you. On the other hand, there are many perks to owning a home that you can’t find when renting. Whatever the case, you now have more information to use when making a home buying decision.