Suze Orman Says You Should ‘Always Buy’ a House in This Scenario
Written by
Adam Palasciano
Edited by
Rebekah Evans
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In today’s economy, purchasing a home seems like an unattainable feat. It has long been considered a cornerstone of the “American dream,” but now achieving this seems out of reach for most. The cost of buying a home has skyrocketed, particularly since the onset of the COVID-19 pandemic. Increased demand, stagnation, supply chain issues and a massive surge in interest rates have all created a home affordability crisis.
Recently on CNN’s Erin Burnett OutFront segment, Burnett argued on the basis that the average American is struggling with the cost of buying a home thanks to out-of-control interest rates; however, financial guru Suze Orman explained that if you have the financial stability, you should “always buy a house” in this scenario.
“Number one is if you have the money: if you have at least a down payment, you have at least an eight-to-12-month emergency fund, you know you can afford the insurance, the property taxes and the maintenance and you want to want to buy a home right now and you can afford it,” Orman said. “Maybe you should think about getting an adjustable-rate mortgage. Maybe a five-in-one where it’s fixed for five years and then it adjusts every year after that. It’s a good chance that by then, interest rates will have come down.”
She said that “adjustable-rate mortgages are almost 1% less than a fixed-rate mortgage.”
If you’ve met the criteria above as outlined by Orman, you could be ready to embark on the home-buying journey. She then says ask yourself the following: “Should you rent or should you buy?”
“If you can afford to buy, you always buy,” Orman said.
It can certainly cost more to buy a home than to rent one in terms of the monthly payment amount; however, you’d be renting a home from somebody who already owns it. Meanwhile, the value of their properties has historically gone up.
So, if you have financial stability and you feel ready, you may want to consider buying instead of renting.
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