By Maria Hinerman

Sep 10, 2014

You have heard both sides of the story:

“If you rent, you’re throwing your money away,” or “Homes will suck up all your money.”

But the truth is that in both cases you are exchanging money for desired goods and services. Each side has advantages and disadvantages, and in both cases, you have a home. When it comes to making a decision, part of it will be financial and part of it will be emotional.  In order to help you decide whether you should rent or buy, it is recommended that you ask yourself these three questions: how much home can you afford, what is most convenient for the location you are looking for, and what are your future expectations?

#1- How Much Home Can You Afford?

Answering this question first can help you make a decision, and in some cases, it might even tip the scale.  There are some great tools out there to help you figure out your budget. The New York Times and Trulia have great Rent or Buy calculators to help your decision, and we have an Affordable House Calculator as well. But remember, these tools are for reference only. If you feel unsure of the answers, contact a Financial Advisor or a Mortgage Loan Originator who can help you see what options are available for your budget. Just because you don’t have the 20% downpayment for a home purchase doesn’t mean you don’t qualify for a mortgage. If you would like to learn more about available loan products, or would like to talk to one of NFM’s Licensed Mortgage Loan Originators, please click here.

#2 – What Is Most Convenient for the Location You Are Looking for?

Something very important to take into consideration when deciding whether to rent or buy is the location. If you are looking to get a home in a large metropolitan area like New York City, Honolulu, San Francisco, or Washington, D.C., you must take into consideration that owning a home is going to be extremely expensive (as these are some of the top 10 most expensive cities in America). If you are looking to buy a house or a condo in these areas, you have to have a big budget, so perhaps renting might be best. On the other end, if you are looking to get a place of your own in a rural area, renting might be far-fetched, since home owners don’t tend to rent their homes and there are few apartment buildings.

#3 – What Are Your Future Expectations?

After you figured out your budget and what the best option is for the location you need, you must figure out your future expectations. Home ownership is a big decision and should fit into your future plans. If you are looking to only stay in the neighborhood for a year, perhaps buying a home might not be the best option. If you are looking to start a family, renting an apartment in the middle of downtown might not be the best option either. Make a 5 or 10 year plan and decide what option best fits.


There are a lot of factors that can influence your decision whether to rent or buy a home. In the end it is all about you: doing what is best for you, your financial situation, and your future expectations. Take time to make sure you make a decision you will be happy with. If you have any questions or if you would like to see if you qualify for a mortgage, to talk to one of our licensed Mortgage Loan Originators today!


These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact us.