All your friends are buying homes. Your dog wants a yard. And you’re wondering if you're throwing money away by renting.  Deciding whether to rent or buy often comes down to what you can afford. Are you financially ready to buy a house? Or is renting still the smarter option for you? Consider the following factors in making the decision to rent or buy a home:

1.  Do you have enough cash for a 5-20% down payment?

Do you have enough cash readily available for a down payment? Having 20% or more means you don’t pay that pesky PMI (private mortgage insurance), which basically protects your lender from going bankrupt if you stop paying your mortgage.

2. Are you planning to move in the next three years?

Unless you're planning to keep your home as a rental (this IS a haven for beach lovers!), if you answered yes, now may not be the right time for you to buy a house.  Focus on where you see yourself for at least the next three years.  If you're not shy about keeping a home here as a rental, make sure you understand the landlord responsibilities that come with rentals.

3.  Can you afford a mortgage payment?

Many financial experts suggest using the formula 28%/36%. In accordance to that formula, your monthly payment should not exceed 28% of your gross monthly income and your total monthly debt payments not exceed 36%.

4.  Factor in home maintenance

Who’s going to fix the leaky pipe? You are. Or a plumber who you pay. As a homeowner, you’re responsible for the upkeep of your home. From carpets to window coverings, new appliances to a new roof, everything costs money and nothing lasts forever.

5. Consider the benefits of owning a home:

• Every payment brings you closer to full ownership. When you pay your rent, that money is gone. But when you pay your mortgage, you work toward 100% ownership.
• You can cash in on appreciation. Your home will most likely increase in value over time depending on the market and your upkeep of the home.
• You have tax advantages. Many home ownership costs —like property taxes—are tax deductible. And if you’re paying off a mortgage, you’ll get to deduct your mortgage interest.
• You have the freedom to make your place "your own". As the owner, you can renovate, remodel - add your own personal stamp to reflect your style.  No landlord can stop you.
• You have more privacy. No more tiptoeing around because the drywall is as thin as a playing card. You have your own space to do as you please. Just you and the peaceful silence.
• It’s all yours! Home ownership is the American Dream and could soon be your reality.

So, talk to the experts!

Meet with the professionals.  At Pink Pearl Real Estate, we offer a free consultation to answer any questions you may have.  A financial adviser is also helpful, and can help you determine the pros and cons of your potential investment - as well as give you an assessment of your financial situation.

Deciding whether or not to buy a house isn’t an easy choice. That’s why it’s smart to partner with a pro who can help you navigate your options.