“Am I wasting money by renting?”
I hear some version of this question all the time.
And my answer might surprise you:
Not necessarily.
I'm a mortgage lender. Obviously, I believe strongly in homeownership and the long-term wealth it can help create.
But that doesn't mean everyone should buy a home right now.
Renting gives you something valuable: flexibility.
Homeownership can give you something different: stability, control and the opportunity to build equity over time.
The better question isn't:
“Is buying better than renting?”
It's:
“Which one makes more sense for me right now?”
Here are seven questions I'd ask before making that decision.
1. How Long Do You Think You'll Stay?
This is one of the first things I'd want to know.
Buying and selling real estate comes with transaction costs.
If there's a good chance you're moving across the country next year, buying may not make sense.
But if you love Denver, expect to stay several years and want to put down roots, the equation begins to change.
There's no magic number of years that makes buying automatically better.
But generally, the longer you own the home, the more time you give homeownership to potentially work in your favor.
2. What's the Real Difference Between the Rent and Mortgage Payment?
Don't compare your $2,500 rent with only the principal and interest portion of a mortgage.
That's not an honest comparison.
Homeownership can include:
Principal and interest
Property taxes
Homeowners insurance
Mortgage insurance, if applicable
HOA dues, if applicable
Maintenance and repairs
But there's another side to the equation.
Part of a mortgage payment may go toward reducing the principal balance and building equity.
Rent doesn't do that.
That doesn't make rent “wasted money.”
You're paying for housing and flexibility.
But when comparing the two, let's compare the whole picture.
3. How Much Cash Would Buying Leave You With?
This is huge.
Suppose you have $50,000 saved.
Could you technically use most of it toward buying a home?
Maybe.
Should you?
That's a completely different question.
I don't love seeing someone become a homeowner and immediately become cash-poor.
Homes need things.
Water heaters break.
Furnaces quit.
Life happens.
I'd rather structure the financing intelligently and leave you with appropriate reserves than celebrate putting every available dollar into the house.
And remember: 20% down isn't necessarily required.
Depending on your qualifications, conventional financing may allow substantially less, and eligible buyers may have access to FHA, VA or down payment assistance programs. Fannie Mae, for example, currently offers eligible HomeReady borrowers financing with as little as 3% down.
4. Are You Financially Ready—or Do You Just Assume You Aren't?
This one frustrates me.
I've talked with plenty of people who spent years assuming they couldn't qualify.
They thought:
My credit isn't high enough.
I don't have 20% down.
I have student loans.
I probably make too much for assistance.
I'll wait until I'm in a better position.
Then we actually run the numbers.
Sometimes they're right.
But sometimes they're far more qualified than they realized.
Fannie Mae's consumer research continues to find that buyers often overestimate both the credit score and down payment needed to qualify for a mortgage.
Don't disqualify yourself.
Get the facts first.
5. What Else Could You Do With the Money?
Buying a house isn't your only financial goal.
Maybe you're aggressively funding retirement.
Maybe you're building a business.
Maybe you have high-interest debt that should be addressed first.
Maybe you value travel and experiences.
Maybe you're saving for children.
This is why I don't believe mortgage planning should happen in a vacuum.
The question isn't simply:
“Can Dave get me approved?”
It's:
“How does buying this home fit into everything else I'm trying to accomplish?”
Those can produce very different answers.
6. What Happens If You Wait?
This is the question people often forget.
Waiting feels like the safe choice because you're not making a decision.
But waiting is still a decision.
Maybe mortgage rates fall.
Maybe home prices fall.
Maybe both happen.
But prices could also rise.
Rates could stay relatively similar.
Rent could increase.
Or the perfect time everyone is waiting for could arrive—and thousands of other buyers could jump back into the market with you.
Nobody knows with certainty.
Recent NAR data illustrates why the answer isn't simple: nationwide affordability has improved compared with a year ago, yet buyers remain cautious and pending sales weakened this summer.
That's why I don't believe in trying to perfectly time the housing market.
I'd rather determine whether buying makes sense based on your circumstances today.
7. Why Do You Actually Want to Own a Home?
This might be the most important question.
Forget interest rates for a minute.
Forget Zillow.
Forget what your parents think you should do.
Why do YOU want a home?
More space?
A backyard?
A dog?
A place to raise your family?
Freedom to renovate?
A more predictable housing situation?
Building long-term wealth?
A future rental property?
There needs to be a reason behind the numbers.
Because buying a home isn't merely a financial transaction.
It's a life decision with a financial component attached to it.
Dave's Take
After more than 26 years in mortgage lending, I'm obviously a huge believer in homeownership.
I've seen what owning real estate can do for families over decades.
But I don't believe in homeownership at any cost.
Sometimes my advice is:
Buy.
Sometimes it's:
Let's get you ready to buy six months from now.
And occasionally it's:
I'd keep renting right now.
That's okay.
My job isn't to convince you to get a mortgage.
My job is to help you make a smart decision.
And there's a very easy way to begin.
Instead of trying to solve the rent-vs.-buy equation with a generic online calculator, let's run your actual numbers.
Your rent.
Your income.
Your debts.
Your savings.
Your comfortable payment.
Your goals.
Your expected timeframe.
Then we can compare the options.
The Bottom Line
Renting isn't throwing money away.
And buying a house isn't automatically a great investment.
Context matters.
But if you've been renting because you assume buying isn't possible—or because you're waiting for the mythical “perfect time”—I'd at least find out what the numbers look like.
You might decide to keep renting.
You might discover you're ready.
Or we might identify three things to work on so you're ready next year.
All three are better than guessing.
Homeownership doesn't need to start with touring houses.
It starts with understanding your options.
And if you'd like help figuring out what those options look like, that's exactly the conversation I'm here to have.
About the Author
Dave Cook | Branch Manager & Loan Officer
Dave Cook is the founder of Denver Mortgage Lounge, a Division of Luminate Bank. For more than 26 years, he's helped individuals and families navigate mortgage financing and make smarter real estate decisions.
Dave's approach goes beyond getting a loan approved. He believes mortgage financing should support a client's broader financial goals and long-term wealth-building strategy.
Dave Cook
Branch Manager | Loan Officer
Denver Mortgage Lounge, a Division of Luminate Bank
201 Columbine Street, Suite 300
Denver, CO 80206
Phone: 303-226-8735
Email: dave@denvermortgagelounge.com
Website: denvermortgagelounge.com
Dave Cook NMLS #274175
Luminate Bank NMLS #1281698
Equal Housing Lender
This article is for educational purposes only and is not legal, tax or financial advice. Loan programs, guidelines and eligibility requirements are subject to change. All loans are subject to credit approval and program eligibility.