Why Buying a Home Isn't For Everyone

If you ask almost every American what their plans are for the future, they will probably tell you they would like to own a home someday. After all, having your own house is the American Dream. But is it really a financial reality for everyone? Probably not. In many cases, it can be much more economical to rent an apartment or a house instead of purchasing one.


One reason not to is the money. When you purchase a house, you will have to qualify for a loan and pay a down payment. The best interest rates are typically offered to those who can put down 20 percent of the cost of the house. Unless you come into a lot of money or save for many many years, you're going to have to get a loan to buy your house. That means your credit will have to be in a good place. If it's not, you'll be facing very high-interest rates if a bank is even willing to loan to you.

Often, the cost of renting an apartment or home is much cheaper than paying a monthly mortgage payment. There are also tons of miscellaneous expenses that come with owning a home. This can include anything from yard grooming to unexpected repairs. If you rent, many of these extra costs are taken care of by the owner. When you're living in an apartment, you can just call up maintenance to fix a broken faucet. If you own your home, that expense will have to come out of your own pocket.

Another factor to consider when buying a home is employment. Are you purchasing your house in a place with plenty of job options? To make buying worthwhile, you want to make sure you'll be living there for at least five to ten years. If your current job is stable and probably won't be going away anytime soon, then buying a home might make more financial sense for you. This could also work if your area has plenty of opportunities in your field. But if your career has you traveling a lot or moving around from state to state every couple of years, renting is probably a better option.

The worst reason to buy a house is because everyone else is doing it. Don't use your friends or family as a barometer for your financial health. If you can't afford to buy a house, don't do it. Take stock of your financial situation and make a decision that is best for you.

PayPath
Follow Us on
Photo by Arlington Research-Unsplash

You’re powering through your morning. You’re in the zone. Getting so much done. But then you get Slacked with an innocent question: “Gotta moment to discuss the Jefferson thing?”

Keep readingShow less

Ever since the pandemic popularized (or forced) virtual meetings and, countless companies adopted the hybrid work model or went completely virtual. And once the public health crisis was declared over, we remained confined to our desks in our kitchens and attics working from home.

Keep readingShow less

April 18 came and your taxes were not ready. So you filed a tax extension. Well, you should file an extension, if you haven't already. Form 4868 is one of easier tax forms to fill out and it will give you an extra six months to get your taxes together. Everyone is eligible for a tax extension. The extension gives you until October 17 to file your taxes, but keep in mind if you owe the IRS money; it is still due April 18. Once you've filed an extension, what happens next?

Keep readingShow less