Take the Quiz: Should I Rent or Own?

House for quiz-01When searching for information about owning a home, there is a lot written about its benefits. But like anything else, deciding to own rather than rent (or vice versa) has its tradeoffs. Taking an honest look at your finances, your lifestyle, and your personal preferences before you start the hunt for a home can save you time, energy, and even money. Take this quick quiz to start figuring out whether renting or owning suits you.

Where do you see yourself living in five years?

A. I’m not sure. I want to stay flexible.

B. I have some ideas of towns and cities where I might like to live, but I’m still getting used to the idea of staying somewhere for a while.

C. I have some ideas of towns or cities I might like, and I’ll want to stay a while. I’m ready to plant some roots.

What is your credit situation like?

A. I have debts I need to pay off, and my credit score could be improved.

B. My debt is relatively under control, and my credit score is okay, but I’d like to boost my savings. I’m not quite prepared for a large change in my expenses.

C. My debt is under control, my credit score is good, and I’m paying my bills on time. I some savings built up too for unexpected expenses.

Your kitchen sink has a leak. Ideally, how would you fix it?

A. I’d rather it were someone else’s responsibility to fix it. I don’t have the time or energy to deal with it.

B. I guess I could try to fix it on my own, but if it’s something I can’t handle I would be worried about the cost.

C. I could try doing some research and fixing it on my own. If I need to call a professional, I am okay with handling that cost.

When you hear terms like “sales and purchase,” “closing costs, “mortgage interest,” and “APR,” you think:

A. Hmm…I’m not sure, but they don’t apply to me now, and I am fine with that.

B. I’m not sure what that all could mean for me, but I’d be curious to find out!

C. I’ve started doing some research, and I know these are things I have to understand when purchasing a home.

If you answered mostly As: Renting may be a better fit for you. Renting has the advantage of flexibility and more lenient financial requirements (although many landlords will check your credit score or at least look for a positive history of payments). You also don’t have to deal with major repairs or property maintenance. If you’d eventually like to be a homeowner—just not now—take this time to stay on top of your credit score and build your savings. Find Financial Freedom is just one great online budgeting resource that could help.

If you answered mostly Bs: It sounds like you’re on the fence. Taking a homebuyer education class or talking to a HUD-approved counseling agency can help you better determine whether you are ready for homeownership. Even if a homebuyer education class makes you decide that renting is better for you right now, you’ll be prepared with knowledge if you decide to take the leap later.

If you answered mostly Cs: Ownership may be a good step for you. Even if you have taken steps to boost your knowledge and keep tabs on your credit, continue to learn about your options and stick to your budget. Start researching mortgage options and assess your wants and needs in a home. Search out programs like our Homebuyer Tax Credit, which can give you extra savings, and start creating a starter fund to prepare for unexpected initial homeownership costs.

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