The finance guru’s advice could save you from a major mistake.
- Renting or buying a home is a big financial decision.
- You don’t want to make a mistake and purchase a home before you’re prepared.
- Suze Orman has outlined some things to consider in deciding whether to buy or rent.
Everyone needs someplace to live, but that doesn’t mean chasing the dream of homeownership is the right choice for everyone. While you’ll often hear that buying a home helps you build wealth, that’s the case only if you’re in a good financial position to buy and qualify for an affordable mortgage you can easily repay.
So, how should you decide whether to rent a property or buy your own place? It can be complicated, but expert advice can help you make the right decision. Suze Orman provides guidance on this issue, detailing some situations when renting makes sense as well as outlining certain conditions to meet before purchasing a property.
Here’s when Suze Orman says you should rent
Orman identified a few situations where renting is better than buying. As she wrote in a post for Oprah.com, she believes it’s a good idea to rent if:
- You have credit card debt.
- You don’t have at least 10% down.
- You think you’ll move within the upcoming five to seven years.
- Buying a comparable property would cost much more than renting.
- You aren’t ready to take on the risks of homeownership.
- You aren’t ready to take on the responsibilities of homeownership.
Orman acknowledges that it’s possible to buy a house with a smaller down payment, especially if you use an FHA loan. But, she firmly believes that if you “haven’t saved for a sizable down payment, you are not yet ready to own.”
She also warns that you shouldn’t get caught up in the pressure to purchase a home just because it seems like that’s the right next step. “There’s absolutely no rule that says you must own. Whatever feels right to you is the right move — as long as you can afford it.”
Here’s when Orman says you should buy a home
So, it’s clear Orman believes renting is a …….