Many people associate buying and owning a home part of the great American dream. And certainly, owning a home is a wonderful thing, especially if you have a stable income and a family, and you plan to stay in the area for the long term. However, even though you might hear that renting versus buying is like “throwing your money away,” there are many things to consider when deciding whether to buy or rent a home.

• Can you truly afford to buy a home? If you have bad credit, you probably won’t qualify for a loan. And very few people have enough cash on hand to put down a down payment without borrowing money. Renters don’t have to worry about this. If you’re going to rent versus buy a home, you simply need first and last month’s rent and a security deposit which you will most like get back eventually.
• Can you cover the mortgage payments if you buy a house rather than renting? If your mortgage is going to cost well over what your monthly rent would be, it make not be a wise move to buy.
• If you buy a home, not only will you have mortgage payments, but you will also have to pay property taxes and maintenance expenses. Every coat of paint or plumbing problem is another out-of-pocket cost.
• Many people think that when they buy a home they’ll get a huge tax benefit, and owners can earn a decent amount in gains on home sales. But if you buy in an area where home prices are declining, you aren’t going to recoup anything.
• Is your job secure? Are you looking for a place to live in a new area because you’re being transferred? Until you know you’re going to stay somewhere for at least two years, it makes more sense to rent than to buy. If you get transferred or lose your job, you will likely lose money on your home if you sell it, and if you stay, you may not be able to keep up with your mortgage payments.
• Houses cost money to maintain. Especially if you’re hiring professionals to help with the upkeep of your home (and yard or garden) you’ll wind up spending much more than the purchase price of the house to keep it in shape. Experts recommend setting aside about five percent of the purchase price to cover repairs and upkeep of a new home.

Before you rush to buy a home, take the time to consider what your family needs are now and in the future and the directions your career might take you. There may be definite advantages to renting versus buying a place to live.