Renting an Apartment Compared to Buying a Home
Renting an apartment VS buying a home is a big topic of discussion and it seems that everyone's looking for a right or wrong answer. It's not wrong to rent if it's a better situation for you and you could even save money buy renting instead of buying. Of course buying seems like the better option because if you end up owning you home for the long term you will have saved more money. There are many different options to weigh when thinking about buying a home like the current interest rates, your debt to income ratio and the amount of money you want to save while living there.
Use my mortgage calculator to see how much you can afford for a monthly payment, then compare it to a rent payment. It basically comes down to the amount of time you plan on living in your next home. Maybe you're just moving in with a roommate for awhile to see what happens, or maybe you want to move out to be on your own. Those are good renting options to adjust and see how everything works. Renting isn't "throwing your money away" as some like to call it. It serves a very good purpose and it costs money to live anywhere. If you just got married or you saved up a down payment to buy something on your own and plan on being there for awhile then it's a good idea to consider buying a home.
Renting an Apartment
Take a look at your time line for the next 5 years. You don't have to write it all down and figure it all out. If you're planning on moving away from the area soon it's probably not a good idea to buy a home. You should also figure out your borrowing power because it not only tells you how much you can afford with the bank but it will help you figure out how much rent you can afford. By renting you're also increasing your credit score with the bank so that when it comes time to buy in the future you'll have a better chance of getting approved for the mortgage. There's a large amount of freedom when renting because the only thing holding you there is the lease. If you buy a home and something comes up where you want to move or need to move then it will be 4-5 months before you sell it, finish the paper work and move out. If you were there for less than 3 years then you probably didn't build much equity and if the house didn't appreciate in that time the real estate fee's will hurt your chances of breaking even.
Buying a Home
You first need to figure out your debt to income ratio by using an interest calculator. Make sure you don't get in over your head! The next step is to check with the bank to see how much they'll allow you to borrow. They have to check your credit, your debt and your income which could be a fairly slow process. They need things like your W2 statements for the last 2 years, your bank statements, social security number, auto loan information and any other loans or credit cards you might have. Some people think if they have a lot of money on their credit card that it weighs heavily against them but it doesn't in all cases. If you have $10,000 on a credit card and your payment is $200.00 per month then you can afford $200.00 less per month on your mortgage. Remember, it's only if you actually pay the monthly payment, if you're not paying the bill it will severely hurt your credit and the bank will be able to pull the information through your credit check. | 
