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Ask the Realtor: Rent or buy? Things you should consider

Ask the Expert
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Homeownership may be part of the American Dream, but it’s not for everyone. For some people, it simply makes more sense to rent. I know this is contrary to what you expect to hear from a real estate agent, but it’s also our responsibility to advise our clients when not to buy.

The first reason should be obvious. Don’t buy if you can’t afford to. If you have a lot of debt or if your credit score is low, you should wait. Paying down your debt will raise your credit score, and you will get a better interest rate on your mortgage, not to mention peace of mind.

You may also want to wait if you cannot come up with a healthy down payment. The more you are able to put down on a home, the lower your monthly payments will be. These payments will include taxes, and if you are putting down less than 20 percent, they will include mortgage insurance as well. If you are unsure what your monthly payments would be, you can find rent-vs.-buy calculators online on sites like realtor.com and Zillow.

But monthly payments are only part of the equation; they are far from being the only expenses associated with homeownership. Buyers need to consider the ongoing cost of home maintenance and repair — and I stress “ongoing.’’ This can range from smaller expenses such as landscaping, appliance repair, and gutter cleanouts to big-ticket items like roof and window replacement. Additionally, you can plan on unexpected outlays for things like leaky pipes, pest removal, a clogged dishwasher, and on and on. You may also want to factor in any updates you would like to do. The list can be endless.

Another consideration is job security. If you have a new job and are not certain about your future, it is not the time to buy. If your job involves frequent transfers, you may not have time to build any equity, so there is a very strong likelihood your next move will end up costing you money. Owning a home makes it more difficult to move.

If you are downsizing and not certain about where you want to move, consider renting. If the market is perfect for selling (because of high demand), it will not be ideal for buying. Don’t jump into a purchase you may regret. Renting will be temporary. Rent somewhere fun like in the city or by the water. Buying a home is probably the most expensive purchase you will ever make. Renting gives you time to consider your options.

Lastly, don’t be pressured into buying a home just because you can afford one. Homeownership is not for everyone. Maybe you want the flexibility to move at any time, or perhaps you just don’t want to deal with maintenance. Whatever the reason, if you are not ready, the American Dream can quickly become a nightmare.

Marjorie Youngren is a broker at Century 21 Commonwealth in Lynnfield. E-mail your questions to marjorie.youngren@commonmoves. Follow her on Twitter MarjorieTeamC21. Subscribe to our free newsletter at pages.email.bostonglobe.com/AddressSignUp.