assetbest 
Some debts feel exciting when you take them on, but none are enjoyable when you have to pay them off.
Almost everyone borrows at some point. The only people I know who never took a loan are my in-laws. They’ve never bought a house, paid for everything — even a car — in cash when the company benefit ended, and they pay their credit cards in full each month. They weren’t stingy; they liked theater, movies, and eating out. They simply saved for what mattered and skipped what was too expensive. They even sent two children to private colleges without student loans on a modest income.
Mortgage debt is often reasonable. A mortgage lets you buy a home you couldn’t afford in cash, and the house may rise in value. Mortgage interest can also lower your federal taxes. For most people, a mortgage is a necessity to buy a house.
But a mortgage only makes sense if you can handle the payments, even if your finances take a hit. The 2009–2010 mortgage meltdown showed what happens when unqualified borrowers are approved for loans: bad information, loans people couldn’t afford, and a lot of regret.
We learned that the hard way. After moving from expensive San Diego to Indianapolis, we bought a beautiful, new house that felt luxurious compared with our old place. We thought we’d stay, but a job took us elsewhere and we had to sell after two years. The local market hadn’t been rising fast, our modern decor didn’t match the area’s taste, and we sold at a big loss. From that experience I took away three clear rules:
– If you aren’t planning to stay put, rent. Buying when you’ll move soon can cost you more than it’s worth.
– Buy a house only if you want the responsibility and can afford it without stretching your budget. If you don’t want maintenance or expect to move often, renting is the better choice.
– Only buy when you plan to stay for a while and have steady income and a healthy emergency fund. Don’t blindly buy up to the bank’s limit — you, not the lender, have to make the payments. I always buy less house than I could technically afford.
Good luck deciding whether to rent or buy — choose what fits your life and finances.
