Should You Buy or Rent a Home?

Homeownership has been part of the American dream for many years. However, many families choose to rent, as the barrier to entry with home buying can be a large one. and owning a home doesn't suit the lifestyles of every individual. Buying or renting a home still allows individuals, couples and families to live in comfort. According to the Joint Center for Housing Studies of Harvard University, 37 percent of households currently rent. Renting or buying are both viable options for individuals and families who are looking to enjoy a preferred standard level of comfort and privacy in a home.

Learn about some of the factors considered when people choose to either rent or buy.

Significant Upfront Costs

Are you ready to put down as much as 3.5–20 percent of the purchase cost of a home in order to buy a home? This amount is in addition to closing costs, moving costs and fees associated with the purchase of a home. Purchasing a home requires the payment of a number of upfront costs. For those that are currently unable to set aside the funds typical of approval for a conventional home loan, renting may be a better option. Individuals who are interested in purchasing a home now or in the future can also look into the broad range of mortgage products available through their bank and from private lenders.

Credit Score and Eligibility Requirements

In order to qualify for a conventional home loan, applicants generally require a relatively high credit score and low debt to income ratio. These two factors allow lenders to get an idea of how much debt an individual currently has and their ability to make regularly scheduled payments. Prospective buyers with low credit scores or significant debt may want to work on these factors before trying to get approved for a home mortgage. Potential buyers may want to request a copy of their credit report to check on their credit score and address any inaccuracies. Individuals working on improving their credit score to get a lower interest rate may want to rent during this period.

Home Maintenance

First-time homeowners may be surprised about how much maintenance they may have to do themselves when owning a home, in Jupiter Island or any other community. From lawn care, to cleaning the gutter, to repairs in the home, homeowners are responsible for maintaining a home and can either perform many of the jobs themselves or hire a professional to complete maintenance and repair work for them. These are just a part of the tasks necessary when buying and owning a home.

When renting, the majority of tenants can rely upon the landlord to address needed repairs and take care of the maintenance of the home and property. Many renters appreciate having such fees included as part of their regular rental payments and enjoy not having to put in the extra effort to maintain or repair the rental or hire someone to handle the issue. People looking to downsize or empty nesters may want to consider renting a property in order to rid themselves of some of the obligations that come with home ownership.

The Market

People continue to rent for a number or reasons. Some are waiting for a better market so that they can get more for their money when they do go to purchase a home. In some areas with competitive markets, it can be difficult to purchase a decent home, even for those with healthy incomes. Much depends on how an individual chooses to invest their money and the current market in a specific area. There are times when it makes sense to sell a property and use the equity to purchase a smaller condo or rent a home.